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Growth and underinvestment: The impact of reactive capital acquisition strategies on market share

Research output: Chapter in Book or Conference Publication/ProceedingConference Publicationpeer-review

1 Citation (Scopus)

Abstract

Many firms fail to deliver on their potential when they delay capacity acquisition decision for markets that have significant growth potential. The growth trajectory of an exciting new product can be dampened if the ability of an organization to meet market expectations in compromised due to insufficient production capacity. In the management science literature, the market growth model provides a formal basis to study the dynamics of growth, and also can be used to provide insight into why new companies often fail. This short paper presents a simplified version of the market growth model, and describes it from an agent-based perspective. The model is specified using an equation-based approach, and sensitivity runs on important delay parameters show the impact of capital acquisition on the growth potential of a firm.

Original languageEnglish
Title of host publicationConference Proceedings - 6th Conference of the European Social Simulation Association, ESSA 2009
EditorsBruce Edmonds, Nigel Gilbert
PublisherThe European Social Simulation Association (ESSA)
ISBN (Electronic)1844690172
Publication statusPublished - 2009
Event6th Conference of the European Social Simulation Association, ESSA 2009 - Guildford, United Kingdom
Duration: 14 Sep 200918 Sep 2009

Publication series

NameConference Proceedings - 6th Conference of the European Social Simulation Association, ESSA 2009

Conference

Conference6th Conference of the European Social Simulation Association, ESSA 2009
Country/TerritoryUnited Kingdom
CityGuildford
Period14/09/0918/09/09

Keywords

  • Growth and underinvestment
  • Market dynamics
  • Operations strategy
  • System dynamics

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