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Competitor Analysis and Interfirm Rivalry: Toward A Theroretical…

- - - - market commonality
      - resource similarity
    - - competitor analysis
      - interfirm rivalry
  - - - more differentiated depiction of the relationships between firms
  - - - Applied to predict attack & response
  - - - concceptualization of competition & competitive relationships
- - - - be affected by market commonality
    - - be affected by resource similarity
    - - a prerequisite for any move
      - be increased by both market commonality and resource similarity
  - - - the awareness of the possibility of retaliation across various markets
  - - - firms feel the effects of each other's moves and are prone to react to them
  - - - rivalry within a strategic group will be less intense than intergroup rivalry
- - - - understand and predict the rivalry
        
        identity of a firm's competitors is assumed to be known
        
        all the research is normative
      - interactive market behavior
    - - Market Commonality
        
        Multiple point competition
        
        Degree of multimarket contact
        
        whether they are direct and immediate competitors
        
        multiple market is treated as aggregate property of the firm or the market
        
        different markets would have different sets of competitors, and the market power each competitor wields would across these markets
        
        each market would play different role in each firm's overall market profile
        
        each market is unique
        
        Definition
        
        the degree of presence that a competitor manifests in the markets it overlaps with the focal firm
        
        the market here is defined to include both product and customer based concepts
      - Resource Similarity
        
        useful in differentiating competitors from a strategic point of view
        
        considers a firm as a unique bundle resources
        
        Definition
        
        the extent to which a given competitor possesses strategic endowments comparable
        
        important for competitive advantage
        
        firms with similar resources are likely to have similar strategic capabilities and competitive vulnerability
        
        firms with divergent resources are likely to have diverse competitive repertoires because of the unique profiles of their
        strategic resources.
    - - different market focus
        
        many firms may not be direct competitors
      - enter specific strategic group
        
        member of the group
        
        individual market level not at firm level
      - compete in the same sets of markets
        
        recognize their interdependence
      - Competing brands are considered direct competitors
    - - awareness of interfirm relationships
        
        critical to the prediction of interfirm rivalry
      - motivation to act
      - capability of taking action
  - - - properties of the industry
      - market structure
    - - Individual competitive move as the unit of analysis
        
        study rivalry's exchange of moves and countermoves
      - Action (competitive move)
        
        introduce new product
        
        enter a new market
        
        acquire its rivals' market shares
        
        reduce rivals' anticipated returns
        
        "first move advantages"
        
        competitors are forced to take a reactive role
        
        Responses
        
        attack are not impunity
        
        defenders' respond can cause ultimate effectiveness
        
        predicting response is now an attribute of the attack
        
        consider defenders' overall market and resource profiles
    - - feature: dynamic and interactive nature
      - actions and responses matter to performances
        
        the greater a firm's tendency to respond
        
        the better its performance
        
        the more responses a firm's action provoke
        
        the worse its performance
- - - - Implication of Transition Law
        
        A is major competitor of B
        B is major competitor of C
        But A is not competitor of C :red_cross:
        
        Each firm will define competitors differently and also experience different competitive threat :!:
        
        Helps to avoid the dangerous assumption that a specific competitor's awareness, motivation and capability
- - - - the strategic importance of each of the markets the
        focal firm shares with the competitor
      - that competitor's market share
        in these markets.
- - - - 163 highest level
        executives who have average industry experience of 25 years :silhouettes:
        
        How :question: