THE ROLE OF SUNK COSTS IN ENTRY PROCESS INTO A FOREIGN MARKET: THEORETICAL APPROACH
Journal Title: Вісник Київського національного університету імені Тараса Шевченка. Економіка. - Year 2014, Vol 5, Issue 158
Abstract
The category of sunk costs is studied along with specific features of entry barriers. Different scientific approaches in defining a category are compared to make author's own. The study elucidates a role of sunk costs, including its influence on researching a market, evaluating an efficiency of entering into market and evaluating its risk. The paper highlights three main components of sunk costs, that are: investments to reduce production costs of incumbents relative to newcomers, investments to change a structure of rival's costs and investments to positive change of a demand on a product. Author proposes to consider sunk costs as a strategic barrier, due to a huge influence of incumbents' activities. A need to invest these costs also determines a high competitiveness of a new firm.
Authors and Affiliations
Kateryna Nadtochii
Keywords
Related Articles
- EP ID EP414571
- DOI 10.17721/1728-2667.2014/158-5/16
- Views 73
- Downloads 0
Strategic Planning as a Necessary Prerequisite to Successful Program Budgeting in Georgia
This article gives answers to following important questions: What are the main tasks and aims of strategic planning and program budgeting in the context of managing the public finances? Why the introduction of linking be...
2030 OUTLOOK FOR UKRAINE: SAFETY FOR THE FUTURE
The urgent question for Ukraine arised to look into the future with regard to the position of views on the future, which are divided by the world and authoritative international organizations. The possibility of Navigati...
THE DYNAMICS OF UNEMPLOYMENT IN A SELECTED GROUP OF EU COUNTRIES
In the article there are synthetically analyzed parameters which characterize labour market in chosen EU countries in view of unemployment. Analysis includes age and gender of potential employee taking into account time...
TYPOLOGY OF REPRODUCTION OF ECONOMIC INTERESTS OF ACTORS
At the modern step of economic development, there is a need for scientific substantiation of the possibilities for resolving contradictions and conflicts of economic interests of actors, searching for tools and mechanism...
DIVERSIFICATION OF ENTERPRISES AT THE DOMESTIC CERAMIC TILE MARKET: ORGANIZATIONAL AND MANAGERIAL ASPECTS
The paper is devoted to the methodological support of management of domestic enterprises' joint activities in the market. The main forms of enterprises' cooperation in market of building ceramics are considered. Discover...