Chapter 5: Competitive Rivalry and Competitive Dynamics

These flashcards cover key concepts from Chapter 5 on Competitive Rivalry and Competitive Dynamics, including terminology and definitions essential for understanding strategic management.

Competitors

Firms operating in the same market, offering similar products, and targeting similar customers.

Competitive Rivalry

Describes competitive actions and responses among firms as they maneuver for an advantageous market position.

Competitive Behavior

The set of competitive actions and responses a firm takes to build or defend its competitive advantages and improve its market position.

Multipoint Competition

Occurs when firms compete against each other in several product or geographic markets.

Competitive Dynamics

The total set of competitive actions and responses taken by all firms competing within a market.

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.

First-Mover

A firm that takes an initial competitive action to build or defend its competitive advantages or to improve its market position.

Second Mover

A firm that responds to the first mover’s competitive action, typically through imitation.

Late Mover

A firm that responds to a competitive action a significant amount of time after the first mover’s action and the second mover’s response.

Market Commonality

The number of markets with which the firm and a competitor are jointly involved and the degree of importance of those markets to each.

Resource Similarity

The extent to which the firm’s tangible and intangible resources compare favorably to a competitor’s in terms of type and amount.

Awareness

The extent to which competitors recognize the degree of their mutual interdependence.

Motivation

The firm’s incentive to take action or to respond to a competitor’s attack.

Ability

The quality of the resources available to the firm to attack and respond.

Non-Market Strategies

Strategies that focus on altering a firm’s institutional environment as part of its competitive strategy.

Market Dependence

The extent to which a firm derives its revenues or profits from a particular market.

Slow-Cycle Markets

Markets in which competitors lack the ability to imitate the focal firm’s competitive advantages that commonly last for long periods.

Fast-Cycle Markets

Markets where competitors can imitate the focal firm’s capabilities quickly and at low costs.

Standard-Cycle Markets

Markets where some competitors may imitate the focal firm’s competitive advantages at moderate costs.