Business Strategy

Dimensions of Market Conduct for Indian Real Estate Industry: A Theoretical Review

Article Details

Pub. Date	: June' 2023
Product Name	: The IUP Journal of Business Strategy
Product Type	: Article
Product Code	: IJBS010623
Author Name	: Manaswini and Monica Aggarwal
Availability	: YES
Subject/Domain	: Strategic Journals
Download Format	: PDF Format
No. of Pages	: 15

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Abstract

To analyze competitiveness in any sector, a deep analysis of the competitive behavior is imperative. The current study focuses on the 'Conduct' part of Mason's Structure Conduct Performance (SCP) Paradigm, which was popularized by Bain and has been adopted by numerous schools of thought over time. This paper examines the research on SCP paradigm and real estate literature in order to find the importance of market behavior of developers in the real estate industry. Several behavior characteristics have been found that might assist real estate developers in improving their performance and gaining a competitive advantage in the market. The SCP paradigm places a high value on conduct. As a result, finding other areas of conduct that real estate companies can employ to obtain a long-term competitive edge is crucial. The paper is based on a careful assessment of the relevant literature. The results of the literature review as well as the implications for future research are discussed.

Introduction

Since the founding publications of Bain (1956), Robinson (1933), Mason (1939) and Chamberlain (1951), the Structure, Conduct, and Performance (SCP) approach to industrial behavior has been widely used. While debates rage over whether SCP approach exists, whether a testable model is viable, and if Game Theory renders the method outdated by reversing its claimed causality, it lives on as part of a larger paradigm known as Industrial Organization research. A vast majority of Industrial Organization studies have concentrated on manufacturing rather than the tertiary sector in general, and real estate business in particular. There are few studies on industrial behavior based on sectors such as banking, airline and tourism industry.

The SCP paradigm is founded on the neoclassical economics notion that by loosening the assumptions of perfect competition, organizations may earn continuous profits while producing inefficiently. As a result, larger shares of market, differentiation of product, largescale benefits, and other "barriers to entry" are considered as important contributors to such profitability. Firms are seen to have more market power as a result of them. The strategy has been met with a barrage of criticism. The SCP paradigm could no longer be viewed as a