5. Competitive Strategy

Question 1

3 Stages to Competitive Strategy

Answer 1

1. Identify Competitors
2. Respond to Competitors
3. Predict what Competitors will do

Question 2

Identify Competitors

Answer 2

Same market/industry, offering products/services that:
* Have the same or similar performance characteristics or usage
* Are sold in the same geographic area
* Their strategic choices directly affect othe

Question 3

Direct Competitors

Answer 3

Set of firms that use a similar strategy to target the same customers
- The combination of market commonality & resource similarity indicates a firm’s direct competitors.

Question 4

Indirect Competitor

Answer 4

Same industry but with different strategies

Question 5

Market Commonality

Answer 5

No. of markets firm and competitors meet each other in - + degree of importance of the individual markets

Question 6

Resource Similarity

Answer 6

Extent to which the firm’s tangible/intangible resources are comparable to competitors in type and amount

Question 7

2. 2 Types of Responses to Competitors

Answer 7

1. Strategic Actions/Responses
2. Tactical Actions/Responses

Question 8

Strategic Responses to Competition

Answer 8

Significant commitments of specific and distinctive resources, difficult to implement, difficult to reverse
E.g. Major Acquisition

Question 9

Tactical Responses to Competition

Answer 9

Fine tune strategy, relatively easy to implement, relatively easy to reverse
E.g. Price Cut

Question 10

What is Competitive Behaviour?

Answer 10

Set of competitive actions/responses to:
- Build or defend its competitive advantages
- Improve its market position

Question 11

3 drivers to Competitive Behaviour

Answer 11

Awareness, Motivation and Capability

Question 12

Competitive Rivalry

Answer 12

Ongoing set of competitive actions and responses between competitors - what else influences the likelihood of attack and response?

Question 13

Likelihood of attack

Answer 13

• First movers influence
• Organisational Size
• Quality (Solve issues first before competitive actions)

Question 14

Likelihood of Response

Answer 14

• Types of effectiveness of the competitive actions
• Actors reputation
• Dependence on the market

Question 15

Multimarket Contact (MMC)

Answer 15

When firms compete against each other in distinct:
- Geographical markets,
- Product categories
- Market segments

Question 16

Competitive Dynamics

Answer 16

The total set of actions and responses of all firms competing within a market.
- Back-and-forth responses from competing firms

Question 17

Degrees of competitive dynamics in markets

Answer 17

• Slow cycle markets
• Fast cycle markets
• Standard cycle markets

Question 18

Slow Cycle Markets

Answer 18

• Firm’s competitive advantages shielded from imitation for long periods of time
• Imitation is costly, therefore it is sustainable

Question 19

Fast Cycle Markets

Answer 19

• Firm’s capabilities contribute to competitive advantages are not shielded from imitation
• Imitation is often rapid and inexpensive.

Question 20

Standard Cycle Markets

Answer 20

• Competitive advantages are moderately shielded from imitation
• Imitation is moderately costly.
• Comp Adv. partially sustained
• Serve many customers and gain large market share
• Consistent experience for customer