Abstract
ABSTRACTMany industries experience a shakeout, which occurs when, after an initial increase, the number of firms drops significantly in a short period of time. A shakeout drives changes in the market structure and, thus, accompanying changes in firms’ strategies. In this paper, we explore differences in firms’ product strategies (i.e. product quality improvement, product line management, and product market strategy) before and after the initiation of an industry shakeout, focusing on the role of product exit. In analyzing a sample of US laser printer manufacturers and their products for the period between 1983 and 2002, we find clear differences in firms’ product exit decisions before and after the initiation of a shakeout. With these findings, our study contributes to the understanding of the link between industry shakeouts and firms’ product strategies.
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