COMP 421 Lecture Notes - Lecture 1: Competitor Analysis
27 May 2018
School
Department
Course
Professor
Competitive Rivalry and Dynamics
Chp 5
Define
Competitors Are 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.
influences an individual firm’s ability to gain and sustain
competitive advantages
Being precise
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 competitor’s competitive action
competitive behavior
set of competitive actions and competitive responses the firm
takes to build or defend its competitive advantages and to
improve its market position.
competitive dynamics
The total set of actions and responses taken by all firms
competing within a market.
multimarket competition
Firms competing against each other in several product or
geographic markets
Competitor Analysis Market commonality
concerned with number of markets with which a firm and a
competitor are jointly involved.
and degree of importance of the individual markets to each
competitor.
A firm with greater multimarket contact is less likely to initiate an
attack, but more likely to respond aggressively when attacked.
Resource Similarity
Is how comparable the firm’s tangible and intangible resources
are to a competitor’s in terms of both types and amounts.
those with similar types and amount most likely to have similar
strengths and weakness - and use similar strategies
Assessing resources diff if critical resources intangible
Used to help a firm understand it's competitors
Studies competitors’ , ,
, and .
future objectives current strategies
assumptions capabilities
with this - better able to predict reaction of competitors to its
actions and responses
Refer to Appendix 1, Table 2 for a diagrammatic framework
of competitor analysis
Drivers of competitive behaviour
Awareness extent to which competitors recognize the degree of their mutual
interdependence that results from Resource similarity and market
commonality
motivation Relates to the firm’s incentive to take action or to respond to a
competitor’s attack, relates to perceived gains and losses
Ability
Ability relates to:
each firm’s resources
the flexibility that these resources provide
Without them, lack ability to
attack a competitor
respond to the competitor’s actions
Multi market commonality
(ie. Firm likely to attack firms with low market commonality rather
than high - but will respond aggressively when high market
commonality firm attacks to protect its position in the market)
Resource Dissimilarity
greater the resource imbalance between the acting firm and
competitors, the greater will be the delay in response by the firm
with a resource disadvantage
but the disadvantaged firm should firm should eventually respond,
no matter how challenging the response
Competitive rivalry's effect on strategy
Success determined by
1.Firm's initial competitive actions
2. How well anticipates competitor's response to them (this is
very key)
3. how well it responds to competitors' initial actions
it affects all types of strategy
It has a dominant influence on the firm's business level
strategy/ies
Firms are usually interdependent
when Firm's actions ahve noticeable effects on its competitors
competitive actions elicit competitive responses from its
competitors.
competitors feel each other’s actions and responses
Marketplace success result of strategies + their
consequences (ie. a good strategy that may make every big
fish an enemy might not be that good)
Start Here
note that these are pretty similar definitions
with minor differences - take care to note the
differences. Also note that what isn't part of
these definitions.
Refer to Appendix 1, table 1 for a linking
diagram
Document Summary
Are firms operating in the same market, offering similar products, and targeting similar customers. Start here competitive rivalry the ongoing set of competitive actions and responses occurring between competitors. influences an individual firm"s ability to gain and sustain competitive advantages. A strategic or tactical action the firm takes to build or defend its competitive advantages or improve its market position. A strategic or tactical action the firm takes to counter the effects of a competitor"s competitive action. Chp 5 competitive behavior multimarket competition set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position. Firms competing against each other in several product or geographic markets note that these are pretty similar definitions with minor differences - take care to note the differences. Also note that what isn"t part of these definitions. competitive dynamics. The total set of actions and responses taken by all firms competing within a market.
