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Extra info for The Butterfly Effect in Competitive Markets: Driving Small Changes for Large Differences
When a major technology innovation arrives, a wave of new firms enters the market, implementing the innovation for profits. However, if the innovation complements existing technology, some new entrants will later be forced out as more and more incumbent firms succeed in adopting the innovation. Such a situation has revealed that the diffusion of Internet technology among traditional brick-and-mortar firms was indeed the driving force behind the rise and fall of dotcoms as well as the sustained growth of e-commerce (Wang, 2005).
Steenkamp and De Jong (2010) conducted a global investigation into the constellation of consumer attitudes toward global and local products, and suggest that international companies should be careful in relying too much on the globalized approach because this strategy may not work well with large segmentations of consumers. Coca-Stefaniak et al. (2010) examine the localization impacts on the business practices and marketing strategies of small retailers in Spain and Scotland, with the purpose of helping lessen the gap between the concepts of globalization and localization.
On the other hand, if companies diffuse unclear information about their products and services, and do not offer the necessary support to consumers in making the right decision at the right time, this will fuel adverse consumer reactions, and put customers at risk of making inappropriate choices, causing bilateral damage to both consumers and company. Despite consumers’ high stakes in the business, sometimes companies pay little attention to default choices. Driving consumers toward a right choice requires companies to balance a complex array of interests, including customers’ wishes and the company’s desire to maximize profits while minimizing risk.
The Butterfly Effect in Competitive Markets: Driving Small Changes for Large Differences by Rajagopal