Chapter 5: Competitive Rivalry & Dynamics Flashcards
rivalry suggests
- firms = mutually interdependent
- affected by each other’s actions/responses
- marketplace success = function of individ strats. & consequences of their use
rivalry can have a major effect on
- financial performance (profitability)
- market position
competitor analysis: 2 dimensions of competition determine the extent to which firms are competitors
- market commonality
=>multimarket = decr comp; decr P(inititate)
- resource similarity => sw, strat, op.
comp rivalry: likelihood of attack
- first mover benefits
- org size
- quality
comp rivalry: likelihood of attack: first mover benefits:
3 risks
- difficult to accurately estimate returns from product innovations
- cost to develop = substantial => reducing available slack
- lack of product acceptance over course of innovations => less willingness in the future to accept risks of being a first mover
comp rivalry: likelihood of attack: first mover benefits: 2nd mover
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comp rivalry: likelihood of attack: first mover benefits: late mover
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comp rivalry: likelihood of attack: org size
large: likely to initiate more (strategic) actions during given period
small: more likely to launch actions & do so more quickly => speed & surprise => variety
comp rivalry: likelihood of attack: quality:
8 product quality dimensions
- performance
- features
- flexibility
- durability
- conformance
- serviceability
- aesthetics
- perceived quality
8 product quality dimensions: performance
operating characteristics
8 product quality dimensions: features
important special characteristics
8 product quality dimensions: flexibility
meeting operating specifications over a period of time
8 product quality dimensions: durability
amount of use before performance deteriorates
8 product quality dimensions: conformance
match with pre-estabilished standards
8 product quality dimensions: serviceability
ease and speed of repair
8 product quality dimensions: aesthetics
how a product looks and feels
8 product quality dimensions: perceived quality
subjective assessment of characteristics (product image)
comp rivalry: first mover benefits: quality: 6 service quality dimensions
- timeliness
- courtesy
- consistency
- convenience
- completeness
- accuracy
6 service quality dimensions: timeliness
performed in the promised period of time
6 service quality dimensions: courtesy
performed cheerfully
6 service quality dimensions: consistency
giving all customers similar experiences each time
6 service quality dimensions: convenience
accessibility to customers
6 service quality dimensions: completeness
fully serviced, as required
6 service quality dimensions: accuracy
performed correctly each time
comp rivalry: likelihood of response: evaluate 3 factors
- type of action
- actor’s reputation
- market dependence
competitive dynamics: varying rates of competitive speed in markets
- slow-cycle
- fast-cycle
- standard-cycle
competitive dynamics: slow-cycle
- comp adv. = sustainable over longer periods of time (diff to understand)
- capability = unique & proprietary
- actions/responses: protect, maintain, extend
- ex: disney, drugs (pfizer & lipitor), copyrights, patents
competitive dynamics: fast-cycle
- comp adv. not sustainable
- tech based & much comp.
- complex decisions: speed & comprehensive
- reverse engineer & % of tech diffusion => rapid imitation
- volatile => innovation = engine of growth
- firm avoids loyalty
- cannibalize own/upgrade
- stretegic alliances
competitive dynamics: standard-cycle
- seek large market share & loyalty (brand) & controlled ops.
- economies of scale
- intense comp bc of:
1) lg volumes
2) mass mkt size
3) scale economies - CCs = less specialized
- imitation comes less quickly and is more expensive
- innovation = incremental
