Industrial structure and strategic takeover in a differentiated market.

Summary The authors highlight the strategic stakes involved in holding a portfolio of brands in a differentiated market. They analyze the optimal absorption policies of a multi-product firm and show how such a strategy obeys the principle of maximum market share connectivity. It is shown that the strategy of capturing new market segments is always dominated by the strategy of strengthening market power in the segments already controlled. They examine, according to the initial industrial structure, the conditions under which the acquisition of a competitor is "friendly" or "unfriendly".