Documente Academic
Documente Profesional
Documente Cultură
STRATEGIC
ACTIONS:
STRATEGY
FORMULATION
Strategic
Management
Management
of Strategy
Competitiveness and Globalization:
Concepts
Seventh edition
Concepts
and Cases and Cases
KNOWLEDGE OBJECTIVES
Studying this chapter should provide you with the strategic
management knowledge needed to:
1. Define competitors, competitive rivalry, competitive behavior, and
competitive dynamics.
2. Describe market commonality and resource similarity as the
building blocks of a competitor analysis.
3. Explain awareness, motivation, and ability as drivers of competitive
behavior.
4. Discuss factors affecting the likelihood a competitor will take
competitive actions.
5. Discuss factors affecting the likelihood a competitor will respond to
actions taken against it.
6. Explain competitive dynamics in slow-cycle, fast-cycle, and
standard-cycle markets.
2007 Thomson/South-Western. All rights reserved.
52
Definitions
Competitors
Firms operating in the same market, offering similar
products and targeting similar customers.
Competitive Rivalry
The ongoing set of competitive actions and responses
occurring between competitors.
Competitive rivalry influences an individual firms
ability to gain and sustain competitive advantages.
53
Definitions
Competitive Behavior
The set of competitive actions and competitive
responses the firm takes to build or defend its
competitive advantages and to improve its market
position.
Multimarket Competition
Firms competing against each other in several
product or geographic markets.
Competitive Dynamics
The total set of actions and responses taken by all
firms competing within a market.
2007 Thomson/South-Western. All rights reserved.
54
Competitors
Engage
in
Competitive
Rivalry
How?
To gain an advantageous
market position
Competitive Behavior
Competitive actions
Competitive responses
What Results?
What Results?
Competitive Dynamics
Competitive actions and responses taken
by all firms competing in a market
2007 Thomson/South-Western. All rights reserved.
55
Figure 5.1
Source: Adapted from M.-J. Chen, 1996, Competitor analysis and interfirm rivalry: Toward
a theoretical integration, Academy of Management Review, 21: 100134.
2007 Thomson/South-Western. All rights reserved.
56
Competitive rivalry:
Affects all types of strategies.
Has the strongest influence on the firms businesslevel strategy or strategies.
57
58
Feedback
Outcomes
Market position
Financial
performance
Drivers of Competitive
Behavior
Awareness
Motivation
Ability
Interfirm Rivalry
Likelihood of Attack
First-mover incentives
Organizational size
Quality
Likelihood of Response
Type of competitive action
Reputation
Market dependence
59
FIGURE 5.2
Source: Adapted from M.-J. Chen, 1996, Competitor analysis and interfirm rivalry:
Toward a theoretical integration, Academy of Management Review, 21: 100134.
2007 Thomson/South-Western. All rights reserved.
510
Competitor Analysis
Competitor analysis is used to help a firm
understand its competitors.
511
Market Commonality
Market commonality is concerned with:
The number of markets with which a firm and a
competitor are jointly involved.
The degree of importance of the individual markets to
each competitor.
512
Resource Similarity
Resource Similarity
How comparable the firms tangible and intangible
resources are to a competitors in terms of both types
and amounts.
513
FIGURE 5.3
Source: Adapted from M.-J. Chen, 1996, Competitor analysis and interfirm rivalry:
Toward a theoretical integration, Academy of Management Review, 21: 100134.
2007 Thomson/South-Western. All rights reserved.
514
Awareness is
the extent to which
competitors recognize the
degree of their mutual
interdependence that
results from:
Market commonality
Resource similarity
515
Motivation concerns
the firms incentive to take
action
or to respond to a
competitors attack
and relates to perceived
gains and losses
516
Ability relates to
each firms resources
the flexibility these
resources provide
Without available
resources the firm lacks
the ability to
attack a competitor
respond to the competitors
actions
517
518
Resource
Dissimilarity
2007 Thomson/South-Western. All rights reserved.
519
Competitive Rivalry
Competitive Action
A strategic or tactical action the firm takes to build or
defend its competitive advantages or improve its
market position.
Competitive Response
A strategic or tactical action the firm takes to counter
the effects of a competitors competitive action.
520
521
522
Second Mover
Incentives
523
524
Second Mover
Late Mover
Organizational
Size- Small
525
526
Conformance
Features
Serviceability
Flexibility
Aesthetics
Durability
Perceived
quality
527
Table 5.1
SOURCES: Adapted from J.W. Dean, Jr., & J. R. Evans, 1994, Total Quality: Management, Organization and Society, St.
Paul, MN:West Publishing Company; H.V. Roberts & B. F. Sergesketter, 1993, Quality Is Personal, New York:The Free
Press; D. Garvin, 1988, Managed Quality: The Strategic and Competitive Edge, New York:The Free Press.
2007 Thomson/South-Western. All rights reserved.
528
Completeness
Accuracy
529
Table 5.1
SOURCES: Adapted from J.W. Dean, Jr., & J. R. Evans, 1994, Total Quality: Management, Organization and Society, St.
Paul, MN:West Publishing Company; H.V. Roberts & B. F. Sergesketter, 1993, Quality Is Personal, New York:The Free
Press; D. Garvin, 1988, Managed Quality: The Strategic and Competitive Edge, New York:The Free Press.
2007 Thomson/South-Western. All rights reserved.
530
Likelihood of Response
Responses to a competitors action are taken
when the action:
Leads to better use of the competitors capabilities to
gain or produce stronger competitive advantages or
an improvement in its market position.
Damages the firms ability to use its capabilities to
create or maintain an advantage.
Makes the firms market position becomes less
defensible.
531
532
533
534
Dependence
on the market
535
Competitive Rivalry
Ongoing actions and responses taking place
between an individual firm and its
competitors for advantageous market
position.
536
Competitive Dynamics
(All firms)
Market speed (slowcycle, fast-cycle, and
standard-cycle
Effects of market
speed on actions and
responses of all
competitors in the
market
537
Competitive Dynamics
Slow-Cycle
Markets
538
FIGURE 5.4
539
Fast-Cycle
Markets
Non-proprietary technology is
diffused rapidly
2007 Thomson/South-Western. All rights reserved.
540
FIGURE 5.5
541
Fast-Cycle
Markets
Firms
Standard-Cycle
Markets
542