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Competitor Analysis and Interfirm Rivalry, G4 (Vivian, Thet Thet, Terry),…
Competitor Analysis and Interfirm Rivalry
Link Competitor Analysis to Interfirm Rivalry
Interfirm Rivalry
Influence the likelihood of competitive attack and response
Affects organizational outcomes such as economic performance and changes in market share
Competitor Analysis
Market Commonality
Awareness increased
Motivation affected
Resource Similarity
Awareness increased
Capability influenced
Market Commonality and Interfirm Rivalry
The greater A's market commonality with B,
the more likely B is to respond to A's attack
Rivals with high multimarket contact are less likely to exit each other's markets because such rivals are strongly committed to defending their positions
Firms tend to react in order to manage interdependencies when facing uncertainty about the actions taken by other firms
The greater B's market commonality with A,
the less likely A is to initiate an attack against B
Awareness: The possibility of retaliation across various markets
Market Commonality Versus Resource Similarity
Market commonality is a stronger predictor of competitive attack and response than resource similarity is
Firms that have the highest market commonality = most direct and mutually recognized competitors
Competitive exchanges with high-market-commonality rivals will have direct and immediate implications for market share
Resource Similarity and Interfirm Rivalry
The greater B's resource similarity with A,
the less likely A is to initiate an attack against B
Assume: All affected competitors would be equally motivated to respond to an attack
Initiator contemplating a competitive attack will assess its own capability of acting
in comparison with the potential defender's capability of retaliation
The greater A's resource similarity with B,
the more likely B is to respond to A's attack
Less likely to respond when response required
substantial resource commitment and major organizational restructuring
Competitors with resource bases similar to the attacker's apt to response
Competitive Asymmetry and Interfirm Rivalry
Any two firms are unlikely to have identical degrees of
market commonality and resource similarity with each other
Because of competitive asymmetry in market commonality and in resource similarity,
the likelihood that A will attack B ≠ the likelihood that B will attack A
Awareness, Motivation, and Capability differ from companies
Stronger rivals may not be aware of the threat from weaker opponents
Weaker opponents view stronger rivals as their main targets
Competitor Analysis
Market Commonality
As the degree of presence that a competitor manifests in the markets it overlaps with the focal firm
Market is a complex and multidimensional construct
Different market definitions are needed for different strategic purposes.
Resource Similarity
As the extent to which a given competitor possesses strategic endowments comparable, in terms of both type
and amount, to those of the focal firm
A primmary objective is to understand and predict the rivalry between firms.
Discussion
Proposes of this article
new conceptualization
Integration
Four Propositions
Reflect Rivalry
Predict
e.g Airline
Implications
The significance of market
Multiple-level
A view of thinking
Allocate resources
Mapping global competitors
Limitations and Future Directions
Suggest
Rivalry
Competitive moves
competitive asymmetry
Perception
Interfirm Rivalry
Action or Attack
As a specific competitive move initiated by a firm
2.Response or Retaliation
A specific countermove, prompted by a rival's attack
Recent investigation of interfirm rivalry has yielded some useful ideas
First, the research recognizes a distinction between the concept of interfirm rivalry and the general conceptualization of competition
Second, rivalry can be analyzed by studying the exchange of moves and countermoves
G4
Vivian
Thet Thet
Terry
Similarity between two objects should not be treated as a symmetric relation
Metric Distance Function: d{a,b) ≠ d{b,a)
If A is a major competitor of B,
and B is a major competitor of C
≠ A is a major competitor of C
If A is B's primary competitor ≠ B is A's primary competitor