all rules (described in this page) are WRT the gws produced by rival.plcs. the post.mato’s consecuences (as described below), take 2 to 3 years to realise

cocoo to find out if the mato.plcs’ proposed post.mato synergies, differ from:   my estimates, and/or from their promises.remedies.conditions (ex given to shs.cma…) <> cocoo has o2.press mato.plcs to tell us of their post.mato MAP estimates…they will refuse as this info could prompt cma to block.

HOW2.foresee matos: 

  • gen.rule: higher n.of matos (in a given ims) >> more compet >> less MAS, lower gws prices, higher gws quality , and higher gws value  >> wpi (cons.buyers win)
  • v.long.term uas (ex.ppps) are, by definition, incomplete >> require ongoing redrafting….ow, become invalid.
  • horiz.matos give a compet.advantage, as they yield( to the mato.plcs): eos>>less prod.costs>>less gws prices>>wpi (consumers/buyers win)
  • horiz.quality.matos (are the gen.rule), as they give more synergies, profits and innovation…  MAS falls or keeps unchanged, due to brand overlap/pruning >> more competition (wrt vert.matos).
  • vert.quality.matos (are the exception) >>gws quality diverges/segms >> higher MAS and lower competition (wrt horiz.matos)

 

 

COCOO HAS O.2analyse CONREPs using DIDAs = consumer.reports (ex.Magazine, by the usa consumers union/TAS) …. why?:

becos they make it possible for me to properly identify the true competitors and the true prod and geo markets . Instead, using econometrics, or SIC.CODES,etc does not really work for this >>  cocoo must use DIDA (diff.in.diff.approach) (to extract (from CONREPs) the true competitors and prod.markets, mato.value…) . DIDA steps:

  • i need to extract out of the conrep, all the factors affecting a particular industry…so i am left with just the estimated [mato impact = [ exts(+/-) + internalities (+/-) ] = synergies (+/-) ] on that ind.
  • i only need extracting and comparing specific gws categories (produced by our mato.plcs and rivals.plcs)…this is easy, as conreps list gws categories [= consumer/buyer perception of what is a gws SUBSTITUTE] >> i can easily digout which plcs are my plcs’ true rivals, by just finding the list of plcs producing those gws substitutes
  • i do not need to waste my time estimating the HHI (ind.competitiveness), becos it does not affect, nor is affected by our post.mato’s gws prices.value.quality
  • i need to isolate the estimated postmato’s gws (quality;price;value) (in a given ims), and COMPARE them with their rivals’ gws (quality;price;value) (in that ims)
  • i can predict which plcs will mato, and with whom….how and why?:   
    • plcs with quality gws, tend to mato with plcs producing lower quality gws….and viceversa
    • the inds with more matos, are those that have more n.of plcs. (obviously)>> cocoo to specialise in inds with more n.plcs
    • inds in decline have slower growth>>more (stealth) consolidation (concentration)>> not higher MAP, but lower n.of brands (less segm.diversif) >> less n.of rivals = horiz matos (gws converge)
    • inds in maturity grow only at the expense of competitors.    new inds have high growth >> less gws quality convergence (post.mato), lower customer service; gws prices dont fall as much.
    • MAP is not a mato driver. 
    • plcs with high MAS are more prone to mato, becos gws prices fall, value increases and quality increases
    • matos with an intl.plc >> higher MAS and higher gws diversity
  • i only need to identify the right counterfactuals (but4test) :

1-are the gws price and quality correlated (between our mato.plcs and rivals)?. if yes, is + or – correlation?.   plcs are in the same market (and are therefore rivals, only when their gws price, quality and/or value are + correlated (which happens whenever consum/buyers have access to quality information (so that they can easily switch, as they have access to plenty of substitite.gws).  [more swithpower = less MAP = less postmato gws prices ] >> there is transparency (as to who the rivals are and which the relevant.market is….. this search for transparecy is why (iPOS=ltd>>plc) are so popular, as becoming plc is a shield against foreign rivals, as the new plc gains ‘info.aggregation’ of foreign.plcs pot rivals, and from pot new inventions…….NSIACT (17 SECTORS)of nat.sec wpi are meant to reduce foreign plc’s ENTRY (to uk markets), becos the mere pot.of a foreign.plc entry, can easily cause mato.plcs to drop MAS, or keep it constant….Thus, vert.matos between national.plcs >> diversif.of gws >> foreign and other national plcs are disuaded from even attempting to enter that national market….>> cocoo: THIS IS AN ENTRY BARRIER >> COCON

2-would pricing have declined, absend the mato?: to answer i need to know:

-are the postmato impacts a continuation of a premerger trend?; 

-are the mato.plcs horiz or vertical?

-(horiz) matos:  between plcs producing same gws >> less gws prices; same/converge gws quality (as gws from both plcs converge, overlap); HIGHER EOS and higher pot.synergies  (EOS = LESS costs to produce gws >> less gws prices >> consumers win (wpi)).   (ex.killer acquis = cannibalisation).   MAS remains constant or even drops (due to brand.pruning)

-(vertical) matos: between plcs producing diff. gws >> diversif.segm into new gws = vertical.mato > prices drop, and synergies happen, but the evidence thereof vanishes…..BUT, although no evidence is left, we know that MAS grows, and EOS drop >> more costs to produce gws >> higher gws prices >> comsumers lose (wpi harm)

     

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