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For example, would we have predicted Microsoft's dominance in the PC market in the early 1980s? Perhaps by 2003 Microsoft may not be a dominant player at all? Could we have conceived a mere 20 years ago that Sony might compete with Microsoft on the one hand, with Disney on the other, let alone Matsushita for electrical goods? The lesson surely is that one of the most difficult tasks is to predict the nature, scale and scope of changes at an industry level. The dynamism of the market system referred to earlier provides the impetus for product evolution and development and uncertainty for those already in the game as to the likely future direction of their particular arena.

The sovereignty issue arises in acute form in regional trading blocks such 20 New Economy - New Competition as the European Union or North American Free Trade Association. If such groups are to be successful they must harmonize rules and regulations to enable firms to compete on a level playing field where the regulations they face are the same from country to country. If such harmonization did not occur firms would simply move to the country with the fewest rules and regulations. Yet each harmonization limits the power of national governments to change the same rules and regulations.

Whereas Hotpoint, Creda, Arthur Martin, Bauknecht would only be instantly recalled in the UK, France and Germany respectively. The lessons are by no means restricted to the white goods industry. The approach that we have employed here is applicable to any industry that supplies experience products, anywhere in the world. What we are essentially saying is that the strategies that a firm uses for influencing consumer Consumer Views 33 perceptions of product quality should be made in the light of knowledge of how its target consumers come to form perceptions of product quality.

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