Rivalry Among Competitiors

Rivalry Among CompetitiorsPorters 5 forces

CompetitorsCompetitive RivalryTo gain an advantageousmarket positionThrough Competitive behaviorCompetitive actionsCompetitive responsesCompetitive DynamicsCompetitive actions and responses taken by all firms competing in a market.Model of Competitive Rivalry Over time firms take competitive actions/reactions Pattern shows firms are mutually interdependent Firm level rivalry is usually dynamic and complex Foundation for successfully building and using capabilities and core competencies to gain an advantageous market position.Competitive AnalysisMarket CommonalityResource SimilarityDrivers of Competitive BehaviorAwarenessMotivationAbilityInter-firm RivalryLikelihood of attackFirst-mover incentivesOrganizational sizeQualityLikelihood of ResponseType of competitive actionReputationMarket DependenceOutcomesMarket positionFinancial PerformanceFeedbackCompetitor Analysis Market Commonality: Each industry composed of various markets which can be subdivided into (segments) Resource Similarity: Extent to which firms tangible/intangible resources are comparable to competitors in type and amount

Market commonality & resource similarity influence three drivers of competitive behavior Awareness Motivation Ability

Other influences include resource dissimilarity The greater the resource imbalance between acting firm and competitors or potential responders, the greater will be the delay in response

Competitive Rivalry Important to understand competitors awareness, motivation and ability in order to predict the likelihood of an attack study likelihood of attack factors What are the strategic and tactical actions? Strategic actions/responses: market-based moves that signify a significant commitment of organizational resources to pursue a specific strategy Difficult to implement and reverse Tactical actions/responses: market-based moves that involve fewer resources to fine-tune a strategy

Interfirm Rivalry: Likelihood of Attack Three possible likelihood of response actions 1. First Mover Incentives 2. Organizational Size 3. Quality

Additional factors affect the likelihood a firm will competitively respond to a competitors actions: 1. Types and effectiveness of the competitive action 2. Actors Reputation 3. Dependence on the Market Finally, if the action significantly strengthens or weakens the firm's competitive position

Competitive dynamics vs. Competitive rivalryCompetitive DyanmicsOngoing actions and responses taking place between all firms competing within a market for advantageous positions.Market Speed(slow cycle, fast cycle and standard cycle).Effects of market speed and actions and responses of all competitors in the market.Competitive RivalryOngoing actions and responses taking place between and individual firm and its competitors for an advantageous market position.Market Commonality and resource similarityAwareness, motivation and abilityFirst mover incentives, size and quality