Capstone Test Review Chapter 5

Flashcards covering key terms and concepts from Chapters 5, 6, and 7, focusing on competitive dynamics, actions, behaviors, and market types.

Competitive Dynamics

The series of competitive actions and competitive responses among firms competing within a particular industry.

Competitive Rivalry

The ongoing set of competitive actions and competitive responses occurring between two rivals as they compete against each other.

Competitive Behavior

The set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages.

Multipoint Competition

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

Competitive Action

A strategic or tactical action the firm takes to build or defend its competitive advantages.

Strategic Action

A market-based move that involves a significant commitment of organizational resources, difficult to implement and reverse.

Tactical Action

A market-based move taken to fine-tune a strategy; it involves fewer resources and is relatively easy to implement and reverse.

Non-market Strategies

Strategies that focus on altering a firm’s institutional environment as part of its competitive strategy, including lobbying and political donations.

First-Mover Benefits

Advantages gained by firms that are first to enter a new market, such as earning above-average returns until competitors respond effectively.

Resource Dissimilarity

The extent to which a firm’s tangible and intangible resources are different from a competitor’s.

Market Commonality

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

Awareness in Competitive Behavior

The extent to which a firm is aware of the characteristics influencing competition, including market commonality and resource similarity.

Motivation in Competitive Behavior

The incentives a firm has to initiate an attack or respond when attacked, primarily based on market commonality.

Organizational Size's Influence on Competition

Small firms are more likely to quickly launch competitive actions, while large firms initiate more competitive actions over time.

Slow-cycle Markets

Markets where a firm's competitive advantages are shielded from imitation for long periods, making advantages sustainable.

Standard-cycle Markets

Markets where competitive advantages are moderately shielded from imitation; firms must continuously upgrade their advantages to remain competitive.

Fast-cycle Markets

Markets where competitive advantages are quickly imitated, making them much less sustainable.

Reputation in Competitive Behavior

The positive or negative attribute ascribed by one rival to another based on past competitive behavior.