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Competitor Analysis & Interfirm Rivalry, 1. (2., %), Awareness …
Competitor Analysis &
Interfirm Rivalry
1.Theoretical Background
2.Constructs & Framework
Core logic
Firm=unit
Pairwise dyad
Focal view
3 Drivers
Market commonality
Shared markets
Importance
Rival strength
Resource similarity
RBV roots
Type + amounts
Sticky assets
2x2 map
I: rivals
II: markets
III: distant
IV: resource
3.Drivers & Propositions
4.Competitive Asymmetry
Theoretical Foundation
Challenging the Symmetry Axiom (Tversky, 1977)
The metric distance symmetry does not hold in real competition
Similarity statements are directional and depend on the "subject" versus the "referent" ("A is like B" $\neq$ "B is like A")
Non-Transitivity of Competition
Violates triangle inequality: If firm A is a primary rival of B, and B of C, A is not necessarily a primary rival of C.
Each dyadic relationship is unique and strictly directional.
Core Conceptual Logic
Focal Firm Vantage Point
Competitor mapping and rivalry must be evaluated from the specific perspective of a focal firm.
The configuration of the competitor matrix (Figure 1) varies depending on which firm is chosen as the anchor.
Unequal Perceived Threats
If firm A considers B as its primary competitor, B may not view A as a major threat.
Heterogeneous resource vectors and diverse market stakes create asymmetric perceptions (Collis, 1991).
Key Propositions
P4a & P4b
Proposition 4a
Existence of Asymmetry
Any pair of competitors is unlikely to share identical degrees of market commonality (MC) and resource similarity (RS) with each other.
Proposition 4b
Behavioral Asymmetry
Due to asymmetric MC and RS, the likelihood that firm A attacks firm B differs from the likelihood that B attacks A.
The likelihood of retaliation/response is likewise asymmetric between the two firms.
Empirical Evidence & Managerial Blind Spots
Airline Case: Hawaiian vs. Megacarriers
Hawaiian Airlines sees American and United as primary mortal threats due to overlap in its core Pacific routes.
American and United perceive Hawaiian merely as a minor local player in isolated route segments, not a primary rival.
IT Industry Case: Sun Microsystems vs. NCR
Sun Microsystems identified DEC, HP, and IBM as its primary rivals.
Despite NCR being twice Sun's size, Sun's CEO noted: "We never see them".
Competitive Blind Spots
Market leaders often suffer from myopia, ignoring seemingly small or distant rivals (Quadrant III/II).
Weaker or fringe firms enjoy substantial strategic leeway to expand when stronger incumbents fail to perceive them or choose not to retaliate (e.g., Japanese MNCs in the 1970s–80s, private labels).
Ultimate strategic challenge: Actively generate and leverage competitive asymmetry to the firm's strategic advantage.
Methodology and Empirical Illustrations
5.1 Research Methodology
Pair-wise Competitor Analysis
Compare firms one pair at a time
Measure each firm's relationship w/ every competitor
Two Measurement Variables
Market Commonality
Resource Similarity
Objective Data
Uses publicly available industry data
Quantitative measurement
Competitor Mapping
Position Competitors based on :
Market overlap
Resource similarity
5.2 Empirical Illustrations
Industry Used
U.S Airline Industry
17 Major Airlines
Market Definition
Each airline route = one market
Market Commonality Measurement
No. of shared routes
Strategic importance of each route
Competitor's market share in shared routes
Resource Similarity Measurement
Fleet size
Financial resources
Organizational capabilities
Strategic assets
Data Validation
Compared objective results
Verified using industry experts
Results of Competitor Mapping
High Market Commonality
High Resource Similarity
Competitive Asymmetry
Different Competitors require Different Strategies
A may see B as its main rival
B may see A the same way
Similar competitive capability
Strong direct competitors
Practical Implications
Helps managers identify true competitors
Predict likely attacks and responses
Allocate competitive resources effectively
Improve strategic decision making
6.Discussion & Integration
Managerial Strategy
Understand their competitors before making important business decisions.
which markets they share
Predict possible attacks and responses.
how important those markets are
what resources their competitors have.
Matching Both Spots
Market Commonality
How much two companies compete in the same markets.
Understand better their competitive relationships
compete
change their strategy
work together
Resource Similarity
How similar their resources and capabilities are.
Limitations and Overall Role
It mainly focuses on existing competitors within the same industry
it should be used together with other ways of analyzing competition.
1.
2.
3.
%
4.
%
5.
50%
6.
70%
%
%
Awareness
Motivation
Capability
V
high com, high sim
high com, low sim
low com, low sim
low com, high sim