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      The Impact of Regulation on Strategic Positioning: Self-Regulation in the RTE Cereal Industry
      24 Sep 2019Working Paper Summaries

      The Impact of Regulation on Strategic Positioning: Self-Regulation in the RTE Cereal Industry

      by Young Hou and Dennis Yao
      Regulations often change the competitive environment firms operate in by inducing product repositioning. This study examines the responses and performance impacts resulting from industry self-regulation to improve the nutritional content of children’s cereals. Dynamic links between product positioning and product brand equity resources are explored.
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      Author Abstract

      In this paper we exploit a natural experiment resulting from self-regulation adopted in the ready-to-eat (RTE) breakfast cereal industry. This event induced product repositioning which compressed the relevant product space and increased competition. Through this lens, we assess specific performance impacts associated with the regulation and develop links between product positioning and product brand equity resources. The latter results provide dynamic connections between positioning choices and the value of resources as determined by consumer demand and market competition. As a group, products constrained by regulation perform relatively poorer than unconstrained products, though unconstrained products are also negatively affected by the increased competition caused by the regulation-induced compression. Among other results, we also find that higher brand equity is not always relatively more valuable than lower brand equity when products are forced to reposition.

      Paper Information

      • Full Working Paper Text
      • Working Paper Publication Date: August 2019
      • HBS Working Paper Number: HBS Working Paper #20-014
      • Faculty Unit(s): Strategy
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      Dennis A. Yao
      Dennis A. Yao
      Lawrence E. Fouraker Professor of Business Administration
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