Strategic behavior and competition in dynamic industry: Greek processed meats

Abstract

The Greek processed meats industry is examined. Firm-level data on sales, media advertising, and production of different products were used to evaluate the terms for competition and determine the relationship between structural and conduct determinants during the period of 1983 to 1995. In analyzing the effects of advertising on the firms' market shares, this study differentiates between television, radio, and print media to account for different consumer responses to messages communicated through different media. Empirical results suggest that the main strategies applied by large firms (product development and media advertising) were significant in explaining their faster growth relative to their smaller competitors, as indicated by both static and dynamic measures of concentration. Informative advertising in print media was found to be the most effective strategy for the firms in the industry during the study period.