Multipoint Competition

Question 1

Multipoint Competition

Answer 1

• Specific type of market power that arises when two or more diversified firms compete against each other in multiple product markets

Question 2

How to recognize multipoint competition

Answer 2

• Company following another one when enters a new market
• Two companies that have nearly identical lists of products/services
• One firm expands into new city or country, and its main rival opens a location near it
  **Firms engage in this to gain market power

Question 3

Whats the goal?

Answer 3

• Neutralize a rival’s move: by competing everywhere the rival does, firm prevents that rival from having “safe” market
• Increase barriers to entry: hard for single product company to enter market when two big companies already offer multiple service points
• Resource sharing