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Chapter Six: Competitive Rivalry and Competitive Dynamics

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Chapter Six: Competitive Rivalry and Competitive Dynamics

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    2. The Strategic Management Process

    3. Competitive Rivalry & Competitive Dynamics Knowledge Objectives Define competitors, competitive rivalry, competitive behaviour, & competitive dynamics. Describe market commonality & resource similarity as the building blocks of a competitor analysis. Explain awareness, motivation, and ability as drivers of competitive behaviour. Discuss factors affecting the likelihood a competitor will take competitive actions. Discuss factors affecting the likelihood a competitor will respond to actions taken against it. Explain competitive dynamics in slow-cycle, fast-cycle, and standard-cycle markets.

    6. From Competitors to Competitive Dynamics

    7. A Model of Competitive Rivalry

    8. A Model of Competitive Rivalry: Competitor Analysis

    9. Competitor Analysis The first step the firm takes to be able to predict the extent and nature of it’s rivalry with each competitor.

    10. Competitor Analysis Market Commonality The number of markets with which the firm and a competitor are jointly involved and the degree of importance of each market. Resource Similarity The extent to which the firm’s tangible & intangible resources are comparable to a competitors in terms of both type & amount.

    11. Competitor Analysis

    12. A Model of Competitive Rivalry: Drivers of Competitive Behaviour

    13. Drivers of Competitive Behaviour

    14. A Model of Competitive Rivalry: Likelihood of Attack

    15. Factors Affecting Likelihood of Attack: First movers allocate funds for product innovation & development aggressive advertising advanced research & development

    16. Small firms are more likely to launch competitive actions to be quicker in doing so. Factors Affecting Likelihood of Attack:

    17. Factors Affecting Likelihood of Attack: Product quality dimensions include: Performance Features Flexibility Durability Conformance Serviceability Aesthetics Perceived quality

    18. Factors Affecting Likelihood of Attack: Quality Dimensions of Goods & Services

    19. Factors Affecting Likelihood of Attack: Quality Dimensions of Goods & Services

    20. A Model of Competitive Rivalry: Response Likelihood

    21. Factors Affecting Response Likelihood Firms study three factors to predict how a competitor is likely to respond to competitive actions: - Type of competitive action - Reputation - Market dependence

    22. Factors Affecting Response Likelihood: Type of Competitive Action Strategic actions receive strategic responses Tactical responses are taken to counter the effects of tactical actions Strategic actions elicit fewer total competitive responses A competitor likely will respond quickly to a tactical action The time needed to implement and assess a strategic action delays competitors’ responses

    23. Factors Affecting Response Likelihood: Reputation An actor is the firm taking an action or response Reputation is the positive or negative attribute ascribed by one rival to another based on past competitive behavior The firm studies responses that a competitor has taken previously when attacked to predict likely responses

    24. Factors Affecting Response Likelihood: Market Dependence Market dependence is: the extent to which a firm’s revenues or profits are derived from a particular market In general, firms can predict that competitors with high market dependence are likely to respond strongly to attacks threatening their market position

    25. A Model of Competitive Rivalry: Outcomes

    26. Outcomes

    27. A Model of Competitive Rivalry: Competitive Dynamics / Feedback

    28. Competitive Dynamics

    29. Competitive Dynamics

    30. Competitive Dynamics

    31. Competitive Advantage Which Eventually Erodes

    32. Obtaining Temporary Advantages to Create a Sustained Advantage

    33. Obtaining Temporary Advantages to Create a Sustained Advantage

    34. Obtaining Temporary Advantages to Create a Sustained Advantage

    35. Sigmoid & Extended Growth Curves with an Example

    36. Sigmoid & Extended Growth Curves with an Example

    37. The Life Cycle & Re-Cycle Nessie Curve

    38. A Model of Competitive Rivalry: Detailed Model

    39. The Strategic Management Process

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