,Chapter 5,Competitive Dynamics,Declining emphasis on single, domestic markets and increasing emphasis on global markets,Advances in communication technology make coordination easier across multiple markets,Advances in technology and innovation have increased competitiveness of small and medium sized firms,National barriers are falling due to the number and scope of trade agreements (GATT/WTO, NAFTA, EEC/EU),Factors Leading to More Complex Rivalry,Competitive Dynamics,Results from a series of competitive actions and competitive responses among firms competing within a particular industry,Competitive Rivalry,Exists when two or more firms jockey with one another in the pursuit of better market position,Relative Size,Speed,Innovation,Quality,Ability for Action and Response,Outcomes,Drivers of Competitive Behavior,Awareness,Motivation,Capability,Competitor Analysis,Interfirm Rivalry: Attack & Response,Likelihood of Attack,First Mover Incentives,Likelihood of Response,Type of Competitive,Action,Dependence on the,Market,Resource Availability,Actors Reputation,Competitive,Slow, Standard,or Fast Cycle,Market Types,Competitive,Sustained,Outcomes,Competitive,Advantage,Temporary,Advantage,Evolutionary,Outcomes,Entrepreneurial,or Market-Power,Growth-Oriented,Actions,Feedback,Model of Interfirm Rivalry: Likelihood of Attack and Response,Drivers of Competitive Behavior,Motivation,Capability,Awareness,Model of Interfirm Rivalry: Likelihood of Attack and Response,Does the firm have appropriate incentives to attack or respond?,Drivers of Competitive Behavior,Motivation,Capability,Awareness,Model of Interfirm Rivalry: Likelihood of Attack and Response,Does the firm have the necessary resources to attack or respond?,Drivers of Competitive Behavior,Motivation,Capability,Awareness,Model of Interfirm Rivalry: Likelihood of Attack and Response,Relative Size,Speed,Innovation,Quality,Ability for Action and Response,Outcomes,Drivers of Competitive Behavior,Awareness,Motivation,Capability,Competitor Analysis,Interfirm Rivalry: Attack & Response,Likelihood of Attack,First Mover Incentives,Likelihood of Response,Type of Competitive,Action,Dependence on the,Market,Resource Availability,Actors Reputation,Competitive,Slow, Standard,or Fast Cycle,Market Types,Competitive,Sustained,Outcomes,Competitive,Advantage,Temporary,Advantage,Evolutionary,Outcomes,Entrepreneurial,or Market-Power,Growth-Oriented,Actions,Feedback,Model of Interfirm Rivalry: Likelihood of Attack and Response,Competitor Analysis,Resource Similarity,Market Commonality,Model of Interfirm Rivalry: Likelihood of Attack and Response,Competitor Analysis,Resource Similarity,Market Commonality,Multipoint competition tends to reduce competitive interactions, but increases the likelihood of response where interaction occurs For example, airlines price flights similarly but respond quickly when competitors introduce promotional prices,Model of Interfirm Rivalry: Likelihood of Attack and Response,Competitor Analysis,Resource Similarity,Do competitors possess similar types or amounts of resources?,Market Commonality,Model of Interfirm Rivalry: Likelihood of Attack and Response,Competitor Analysis,Resource Similarity,Market Commonality,Firms are less inclined to attack a firm that is likely to retaliate,Firms with dissimilar resources are more likely to attack,Firms with similar resources are more likely to be aware of each others competitive moves,Model of Interfirm Rivalry: Likelihood of Attack and Response,Relative Size,Speed,Innovation,Quality,Ability for Action and Response,Outcomes,Drivers of Competitive Behavior,Awareness,Motivation,Capability,Competitor Analysis,Interfirm Rivalry: Attack & Response,Likelihood of Attack,First Mover Incentives,Likelihood of Response,Type of Competitive,Action,Dependence on the,Market,Resource Availability,Actors Reputation,Competitive,Slow, Standard,or Fast Cycle,Market Types,Competitive,Sustained,Outcomes,Competitive,Advantage,Temporary,Advantage,Evolutionary,Outcomes,Entrepreneurial,or Market-Power,Growth-Oriented,Actions,Feedback,Model of Interfirm Rivalry: Likelihood of Attack and Response,Interfirm Rivalry: Attack & Response,Likelihood of Attack,First Mover Incentives,Likelihood of Response,Type of Competitive,Action,Dependence on the,Market,Resource Availability,Actors Reputation,Model of Interfirm Rivalry: Likelihood of Attack and Response,First Mover,Second Mover,Interfirm Rivalry: Attack & Response,Likelihood of Attack,First Mover Incentives,Likelihood of Response,Type of Competitive,Action,Dependence on the,Market,Resource Availability,Actors Reputation,Whether a competitor is likely to respond depends on several key factors,Model of Interfirm Rivalry: Likelihood of Attack and Response,Types of Competitive Actions,Gauging the Likelihood of Response,Actors Reputation,Type of Competitive Action -Tactical or Strategic,Market Dependence,Competitor Res