Wharton Professor Olivier Chatain on Friction and Competition
Episode Description
When developing business strategies, it is wise to think about frictions, the forces that make it difficult for buyers and sellers to connect. Those elements location, convenience or even a customers desire to support the little guy can give a small local retailer a fighting chance against the pricing and marketing power of a nearby national chain store, according to research by a Wharton management professor and an INSEAD colleague. đź“‚ Management
Brief Summary
This episode covers market friction and its effects on competition and strategy, featuring insights from Peter Zamsky's research.
Key points
- Understanding Friction in Competition. Friction in the market can impact customer behavior and competition. It’s crucial for managers to understand these dynamics.
- The Optimal Level of Friction. Finding the right balance of friction can be beneficial for businesses, even if it means losing some customers.
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Episode highlights
- Understanding Friction in CompetitionFriction in the market can impact customer behavior and competition. It’s crucial for managers to understand these dynamics.“Friction can make customers less likely to shop around.”0:25Jul 21, 2009
- The Optimal Level of FrictionFinding the right balance of friction can be beneficial for businesses, even if it means losing some customers.“Businesses want to have a certain level of friction.”7:32Jul 21, 2009
Episode quotes
Tension
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