Ch.5 Competitive Rivalry and Competitive Dynamics

Competitive behavior

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

Competitors

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

Competitive rivalry

the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position

Competitive dynamics

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

Multimarket competition

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

strategic action or a strategic response

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

Competitive action

strategic or tactical action the firm takes to build or defend its competitive advantages or improve its market position.

Market commonality

concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each

Resource similarity

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

competitive response

a strategic or tactical action the firm takes to counter the effects of a competitor’s competitive action

tactical action or a tactical response

market-based move that firms take to fine-tune a strategy; these actions and responses involve fewer resources and are relatively easy to implement and reverse

Slow-cycle markets

markets in which competitors lack the ability to imitate the focal firm’s competitive advantages that commonly last for long periods, and where imitation would be costly

second mover

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

first mover

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

late mover

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

quality

when the firm’s products meet or exceed customers’ expectations

Fast-cycle markets

markets in which competitors can imitate the focal firm’s capabilities that contribute to its competitive advantages and where that imitation is often rapid and inexpensive

Standard-cycle markets

markets in which some competitors may be able to imitate the focal firm’s competitive advantages and where that imitation is moderately costly