WALTER J. FERRIER University of Kentucky

1. Competitive Dynamics: Evaluation, Evolution, and Future Direction WALTER J. FERRIER University of Kentucky

2. What is Competitive Dynamics?Where is it headed? • …a paradigm? • …a theory? • …a pre-theory? • …a view? • …a reasoning? • …a lens? • …a method? • Research design element • Observational mechanism • Measurement technique

3. Info processing Social networks Managerial cognition Multi-market competition Prospect/Threat rigidity First-mover Institutional theory Complexity Communication Knowledge Signaling Resource-based view Real option theory Game theory Strategic groups Structure-conduct-perform. Dynamic limit pricing Austrian economics Corporate entrepreneurship Dominant firm/Oligopoly Force field (from psychology) Population ecology Integrated/Contributing Theories

4. Integrated/Contributing Theories • What do they explain? • Competitive behavior? • …its antecedents, contexts? • …processes? • Does competitive dynamics enable these other theories explain, observe, conceptualize, measure: • “behavior” • “competition” • “events” • “dynamic interactive processes” • “change” • other things?

5. A Pre-Theory of Competitive Inter-Action:Some Boundary Conditions • Actor relativity/interdependence • The firm relative to: • Itself (over time) • Dyadic partners • Groups • Industry members • Other non-rivals • On factors/dimensions such as: • Competitive actions • Resources/capabilities • Firm characteristics • Outcomes

6. Pre-Theory of Competitive Inter-Action • Dynamic • Explicitly accounts for: • Time • Change • Evolution • Contingencies • Processes

7. Pre-Theory of Competitive Inter-Action • Has impact/consequences on: • Performance • Relative • Absolute • Behavior of other firms • Supply chain members • Customers • Suppliers • Regulators • Investors • Society

8. Pre-Theory of Competitive Inter-Action • Other • Uncertainty, unknowability • Imperfect information • Thought, intent, purpose • Not costless

9. Theoretical Scaffolding/Fulcrum • Awareness • Alertness • Vision • Scanning • Filtering • Motivation • Intention • Valence • Emotion • Ability • Organizational enablers/constraints • Contextual enablers/constraints • Theoretical Integration Required: • “Other theories” support • and explain logic when integrated • with this AMA theoretical • scaffolding – e.g.: • TMT demographics • Institutional theory • Social network theory • RBV

10. Pre-Theory of Competitive Inter-Action Organizational Drivers Firm 1 Strategy Awareness Industry Structure Drivers Perf Competitive Inter-Action Ability Motivation Cognitive Drivers Firm 2 Strategy Institutional Drivers Socio- Relational Drivers Other?

11. Q:What is an action? A: “An externally-directed, observable competitive move ….”Resource-action “cloud chamber”(Barney, 1994) Organizational Routines/Culture The Competitive Marketplace Knowledge/ Technology Distribution Leadership Price Product Reputation/ Image/ Brand Marketing

12. Levels of Analysis Triad Firm Dyad Wal-Mart Sears Wal-Mart Wal-Mart Sears Macy’s Network Group Industry (or Population) Sears Sak’s Sak’s Wal-Mart Wal-Mart Nordstrom Nordstrom Penny’s K-Mart K-Mart Macy’s Wal-Mart Penny’s Sear’s Sear’s Target Penny’s Macy’s Macy’s Target

13. Levels of Aggregation Individual Action (or response) Action-Response Dyad Competitive Repertoire 6 × Price Prod Price Mkt 1 × Prod 4 × Mkt 2 × Signaling 1 × Legal Competitive Attack attack Boeing Mkt Signal Prod Price Legal counter attack Airbus Mkt Mkt Prod Price Price time

14. Potential/Challenging Avenues for Future Research • Network embeddedness • Cognition • Decision-making • Resource/capabilities

15. Network Evolution, Competitive Actions and Performance t1 t2 t3 A A A B B B Focal Firm Focal Firm Focal Firm C C E D Performance time Mkt Price Mkt Prod Mkt Mkt Prod Price Price

16. Cognitive/Emotional/Personality-basedDrivers of Competitive Inter-Action

17. Strategic Decision-making Drivers of Competitive Inter-Action

18. Capabilities and Actions:Competitive “Spectroscopy” Competitive Forces Organizational Routines/Culture Knowledge/ Technology Intended Target Leadership Reputation/ Image/ Brand Actual Performance Price Mkt Product

19. What is the next “big thing”? • Phenomena • Constructs • Measures • Levels of analysis or aggregation • Data • Unobservables • Analytical techniques • Theory

20. Physics Physical Optical Quantum mechanics Biology Molecular/DNA Virology Medicine Neurology Psychiatry Kinesiology Music Perception/appreciation Composition theory Experimental Aesthetics Perception Interpretation Subjective judgment Non-Organizational/Economic Theories

21. What is Competitive Dynamics? • Coaching a basketball game • Training a hunting dog • Conversation/argument between husband & wife K Phenomenon A Z time • Rivalry: Airbus vs. Boeing • Negotiating a raise • Writing an operatic duet

22. Competitive Dynamics:Instrumentality and Application • An (any?) open-system process that: • Is interactive • Contains multiple actors • Behavior and outcomes relative among actors • Contains distinct, observable elements, events, or happenings • Contains some perceptual and actual uncertainty or unknowability • Requires some thought, intent, purposefulness on behalf of actors • Is not costless

23. Your comments and conclusions?Unresolved issues?