Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support

Advertising Sunk Costs and Credible Spatial Preemption

Louis A. Thomas
Strategic Management Journal
Vol. 17, No. 6 (Jun., 1996), pp. 481-498
Published by: Wiley
Stable URL: http://www.jstor.org/stable/2486929
Page Count: 18
  • Download ($42.00)
  • Subscribe ($19.50)
  • Cite this Item
If you need an accessible version of this item please contact JSTOR User Support
Advertising Sunk Costs and Credible Spatial Preemption
Preview not available

Abstract

Large sunk investments in advertising allow managers to credibly preempt potential entrants by introducing new products prior to anticipated increases in market growth. Previous investment in advertising can lower a firm's cost to introduce new products allowing it to credibly preempt potential entrants. Entrants may not have enough residual share to find it profitable to enter later, and incumbents find it profitable to keep new products in the market even if entrants choose to enter. I present empirical evidence from the RTE cereal industry.

Page Thumbnails

  • Thumbnail: Page 
[481]
    [481]
  • Thumbnail: Page 
482
    482
  • Thumbnail: Page 
483
    483
  • Thumbnail: Page 
484
    484
  • Thumbnail: Page 
485
    485
  • Thumbnail: Page 
486
    486
  • Thumbnail: Page 
487
    487
  • Thumbnail: Page 
488
    488
  • Thumbnail: Page 
489
    489
  • Thumbnail: Page 
490
    490
  • Thumbnail: Page 
491
    491
  • Thumbnail: Page 
492
    492
  • Thumbnail: Page 
493
    493
  • Thumbnail: Page 
494
    494
  • Thumbnail: Page 
495
    495
  • Thumbnail: Page 
496
    496
  • Thumbnail: Page 
497
    497
  • Thumbnail: Page 
498
    498