Abstract:
It is almost a truism that firms those strategize market-based strategies are potentially more successful than firms those do not. In the global space, non market-based strategies cannot be created or exploited easily, especially by firms from developing economies. Hence, the incentive for firms to strategize their market-based strategies instead of implementing non market-based strategies is necessary for their international success. This study adopted laboratory experiment to explore the process of strategizing incentive creation through increasing level of competition. This study answers two important claims. Firstly, more intensive policy leads to more competitive market. Secondly, more competitive market leads to more competition level of market-based strategy implementation. The experimental result supports these two claims. By confirming this ex-ante process of competitiveness creation, it serves as the confirmatory study of the argument that firms will be incentivized to create and exploit their competitive advantage by a competition in domestic market. Furthermore, the mechanism is also affected significantly by collectivism-individualism cultural dimension. This cultural effect is also confirmed by the experimental result.
