A strategic pre-commitment occurs when a firm:
A) commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit.
B) commits to some actions after rivals take theirs, with the aim of increasing its future competitive profit.
C) commits to some actions before rivals take theirs purely by accident.
D) commits to some actions after rivals take theirs because there are no other options.

Question

Quizplus · Accepted Answer

A strategic pre-commitment is a deliberate and proactive commitment to a course of action before rivals take theirs. The aim is to increase a firm's future competitive profit by creating a barrier to entry for competitors, cementing a first-mover advantage, or gaining credibility with customers and suppliers. Therefore, choice A is the best option.

A Strategic Pre-Commitment Occurs When a Firm