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- Title
INVESTMENT AND COMPETITION FROM BOOM TO RECESSION: A CASE STUDY IN THE PROCESSES OF COMPETITION-- THE DRY CLEANING INDUSTRY.
- Authors
Shaw, R. W.
- Abstract
This article analyzes the relationship between investment and the competitive process in response to an innovatory disturbance in the dry cleaning industry. Relatively high profits combined with the recognition of the ease of entry led to massive new entry, expansion and retaliatory investment culminating in excess capacity, price wars and a struggle for survival. The major disturbance initiating this process was the advent of small on-the-premises cleaning unit shops providing a rapid and personal service and replacing the relatively slow factory based operations which serviced large numbers of cleaning reception centers. Relatively strong firms had three choices regarding competitors: buy them out and close down some of the total group's capacity; agree with competitors to reciprocal closing of shops; and engage in a competitive war of attrition.
- Subjects
DRY cleaning; DRY cleaning industry; COMPETITION; DIVERSIFICATION in industry; INVESTMENTS; RECESSIONS; TECHNOLOGICAL innovations; PRICE regulation; PRICE cutting
- Publication
Journal of Industrial Economics, 1973, Vol 21, Issue 3, p308
- ISSN
0022-1821
- Publication type
Article
- DOI
10.2307/2098152