On October 16, Professor Ahmed Khwaja from Yale School of Management gave a research seminar for the School of Business Marketing Department about “firm expansion, size spillovers and market dominance in retail chain dynamics.” This research examines firm expansion and contraction decisions, and in particular, focuses on the role of firm size on future profitability and market dominance. By developing a dynamic structural framework and applying it to the Canadian hamburger chains market, the research illustrates the drivers of McDonald’s dominance. McDonald’s has a stronger “institutional memory” in the sense that it is able to retain its advantage in profitability for a longer period of time. This interacts with brand equity and firm size to create important long-term benefits for McDonald’s.
Ahmed Khwaja is Assistant Professor of Marketing at Yale School of Management. He received a Ph.D. in economics from the University of Minnesota and taught at Fuqua School of Business of Duke University before joining Yale. His research interests focus on dynamic games and consumer choice dynamics. He has published in Marketing Science, RAND Journal of Economics, Journal of Business & Economic Statistics, Journal of Econometrics, among others.