Competitive Dynamics in Strategic Management

2021 ◽  
Author(s):  
Claudio Giachetti ◽  
Giovanni Battista Dagnino
Keyword(s):  
Competitive Dynamics ◽  
Integrative Model ◽  
Competitive Advantages ◽  
Factors Affecting ◽  
Early 21St Century ◽  
Institutional Conditions ◽  
Rival Firms ◽  
Competitive Dynamics Research ◽  
And Performance ◽  
Competitive Actions

Competitive dynamics inquiry originates from a sequence of attacks and counterattacks among firms in an industry. Firms attack and respond to attacks of rivals in order to strengthen or defend their competitive position within their competitive space. Competitive dynamics research is thus centered on the analysis of how the firm’s actions affect rivals’ reactions and performance. Actually, the nature of competitive dynamics research is the open recognition that firm strategies are “dynamic”: Strategic actions initiated by one firm may trigger a series of actions among rival firms. The new competitive environment in many industries has generated the inception of furious competition, emphasizing flexibility, speed, and innovation in response to fast-changing technological and institutional conditions and temporary competitive advantages. The key constructs and the intellectual roots of competitive dynamics (i.e., Schumpeter’s theory of creative destruction and industrial organization economics and related oligopoly theories) offer some practical examples of industry and firm cases where competitive dynamics have found their main applications. The relevant underpinnings of the awareness–motivation–capability (AMC) framework provide an integrative model of the key behavioral drivers that shape a competitive actions and responses framework (i.e., the factors influencing the firm’s awareness of the context; the factors inducing or impeding the motivation of firms to respond to competitors’ action; and the capability-based factors affecting the firm’s ability to undertake actions), the three key attributes (i.e., the specific actions of firms in the industry, the firm’s competitive interdependence, and the antecedents and performance implications of firms’ competitive actions and reactions), and the three main levels of analysis used in competitive dynamics literature (i.e., action-level studies, business-level studies, and corporate-level studies). Some insights regarding the relationship between dynamic competition and the sources of temporary competitive advantage, coopetition dynamics, as well as the kind of accelerated competition epitomizing early 21st-century digital dynamics settings update the traditional competitive dynamics flavor, as they are connected with firms’ strategic interaction and the pursuit of temporary advantages.

The Effects of TMT Faultlines and CEO-TMT Power Disparity on Competitive Behavior and Firm Performance

2018 ◽  
Vol 44 (5) ◽  
pp. 874-914 ◽  
Author(s):  
Mengge Li ◽  
Carla D. Jones
Keyword(s):  
Firm Performance ◽  
Performance Outcomes ◽  
Competitive Behavior ◽  
Upper Echelons ◽  
Power Disparity ◽  
Negative Effect ◽  
Managerial Implications ◽  
Competitive Dynamics Research ◽  
And Performance ◽  
Competitive Actions

Although upper echelons scholars have drawn from the demographic faultlines concept to study top management team (TMT) subgroup dynamics, the effects of TMT faultlines on competitive behavior and performance outcomes have not been well documented. To gain greater insight, we develop a model that connects TMT faultlines, CEO-TMT power disparity, competitive behavior, and firm performance. We hypothesize that TMT faultlines and CEO-TMT power disparity jointly determine a firm’s competitive aggressiveness and simplicity, and these two competitive behaviors influence firm performance. Using a sample of 295 U.S. firms in 146 industries from 2000 to 2013, our findings indicate that (a) TMTs with strong faultlines take fewer and simpler competitive actions, and CEO-TMT power disparity further worsens the negative effect on the volume of competitive actions, and (b) fewer and simpler competitive actions benefit short-term firm performance; however, they hurt the long-term firm performance trend. These findings contribute to the upper echelons and competitive dynamics research and suggest important managerial implications.

The competitiveness of emerging country multinational enterprise

2017 ◽  
Vol 27 (3) ◽  
pp. 208-216 ◽  
Author(s):  
Peter J. Buckley
Keyword(s):  
Direct Investment ◽  
Home Country ◽  
Multinational Enterprise ◽  
Competitive Advantages ◽  
Financial Flows ◽  
Content Type ◽  
Emerging Country ◽  
Rival Firms ◽  
Competitive Actions ◽  
Country Specific

Purpose This paper aims to conduct a theoretical enquiry into the questions as to whether emerging country multinationals’ competitiveness derives from country-specific advantage (CSA) or firm-specific advantages (FSA). The case of China is also examined. Design/methodology/approach CSAs and FSAs are examined both in theory and in the specific case of China as explicators of outward foreign direct investment from emerging countries. Findings FSAs and CSAs are found to be imprecise explanatory mechanisms to explain the competitiveness of emerging country multinationals. The examination of imperfections in emerging markets and in global markets and the internalisation responses of firms in different contexts is found to be a superior explanation of the financial flows classified as “outward direct investment”. Originality/value Internalisation theory requires a focus on mechanisms to convert home country attributes into competitive advantages and suggests that FSAs are context dependent, ephemeral and subject to negation by the competitive actions of rival firms.

scholarly journals EXPRESS: Mitigating industry contagion effects from financial reporting fraud: A competitive dynamics perspective of non-errant rival firms exploiting product-market opportunities

2021 ◽  
pp. 147612702110259
Author(s):  
Eugene Kang ◽  
Nongnapat Thosuwanchot ◽  
David Gomulya
Keyword(s):  
Financial Reporting ◽  
Product Market ◽  
Competitive Dynamics ◽  
Research And Practice ◽  
Contagion Effects ◽  
Market Opportunities ◽  
Rival Firms ◽  
Stock Market Valuations ◽  
Competitive Actions ◽  
Market Valuations

Existing studies show that financial reporting frauds by errant firms cause declines in stock market valuations for non-errant rival firms (i.e., industry contagion effects). We posit that contagion effects may be mitigated by investors’ expectations of non-errant rivals exploiting product-market opportunities at the expense of errant firms. We apply the competitive dynamics literature to argue that non-errant rivals experience lower contagion effects when they have more available slack to engage in competitive actions. This effect is expected to strengthen when rival firms have previously deployed more resources for R&D and advertising investments or have higher prior market share growth to demonstrate effective deployments of available resources. These arguments are supported for contagion effects from reports of U.S. SEC investigations from 2001 to 2004. We contribute to research and practice by going beyond discussions on corporate governance to evaluations of key competitive attributes that investors assess when reacting to such frauds.

Competitive Dynamics

Management ◽  
2019 ◽  
Author(s):  
Anja Tuschke ◽  
Viktoria Judith Salomon
Keyword(s):  
Theoretical Perspective ◽  
Large Body ◽  
Performance Outcomes ◽  
Competitive Dynamics ◽  
Multimarket Contact ◽  
Michael Porter ◽  
Mutual Forbearance ◽  
Multimarket Competition ◽  
Competitive Dynamics Research ◽  
Competitive Actions

This article introduces research in competitive dynamics, a collection of work that has developed within the field of strategic management since the late 1980s. Competitive dynamics is the study of interfirm rivalry constituted of competitive actions and responses, their micro- and macro-level context as well as their antecedents and consequences (Chen and Miller 2012, cited under Reviews). Related research addresses fundamental questions such as: “Why do firms engage in competitive rivalry?” “What characterizes the competitive interaction between firms?” “How do focal firms’ competitive actions and rivals’ responses influence firm performance?” “How do contextual factors influence competitive dynamics?” Competition has long been at the center of academic debate, starting with the analysis on the functioning of economic markets and Adam Smith’s welfare competition. While this debate had traditionally been dominated by economists, scholars such as Michael Porter introduced a management perspective on competition. Within the management discipline, two conceptions of competition developed. In a more static conception based on economic theory, competition was formalized as an inherent characteristic of market structures, viewing market forces as determinants of the degree and the type of competition within an industry (Baum and Korn 1996, cited under Multimarket Contact, Multimarket Competition, and Mutual Forbearance). A second conception was motivated by Joseph Schumpeter’s concept of “creative destruction” and the Austrian school of economics (Smith, et al. 2001, cited under Reviews). This dynamic conception of competition accentuates the individual behavior of each competing firm (Baum and Korn 1996, cited under Multimarket Contact, Multimarket Competition, and Mutual Forbearance) and became known as “competitive dynamics research.” It assumes that performance differences between firms operating in the same industry are the result of competitive actions that are aimed at obtaining successive temporary advantages (Young, et al. 1996, cited under Competitive Actions: Characteristics, Drivers, and Performance Outcomes). Since the beginning of the 1990s, the competitive dynamics research program has flourished, and a large body of work has emerged within the literature on competitive strategy, consisting of several sub-streams such as competitive action and response, first-mover advantage, and multimarket competition(Ketchen, et al. 2004, cited under Reviews). Research within these sub-streams is largely unified by its reliance on a common theoretical perspective, the awareness-motivation-capability (AMC) framework (Chen 1996, cited under Awareness-Motivation-Capability Framework). Leading scholars in the field of competitive dynamics are, among others, Ming-Jer Chen, Walter J. Ferrier, Danny Miller, and Ken G. Smith.

scholarly journals Competitive Rationales: Beneath the Surface of Competitive Behavior

2021 ◽  
pp. 014920632110405
Author(s):  
Goce Andrevski ◽  
Danny Miller ◽  
Isabelle Le Breton-Miller ◽  
Walter Ferrier
Keyword(s):  
Resource Use ◽  
Competitive Dynamics ◽  
Competitive Behavior ◽  
Professional Basketball ◽  
Competitive Action ◽  
Competitive Dynamics Research ◽  
Tactical Decisions ◽  
Competitive Actions ◽  
Strategic Outcomes ◽  
Multicase Study

Competitive dynamics research has focused on studying whether rivals are able and likely to carry out competitive actions, typically by examining indirect reasons such as characteristics of the actions themselves, the firms involved, or the competitive context. We explore why rivals initiate a specific competitive action at a particular time and situation. Drawing from the philosophy of action literature, we introduce the concept of competitive rationales to examine the primary reasons that cause tactical actions. Given the rapid exchanges characterizing tactical competitive dynamics, we conducted an inductive, multicase study to explore the reasons behind over 800 discrete tactical decisions carried out by 9 professional basketball coaches during 15 basketball games. To garner insight, we develop a conceptual framework revealing their types and scope. Even during intense head-to-head rivalry, most rationales were not rivalrous but were instead organizational—to optimize resource use, strategic consistency, and reputation—or social—to manage relationships. Moreover, the three main types of rationales varied in scope, extending beyond immediate competitive situations and rivals to address longer term, strategic outcomes, and assorted stakeholders. Thus, our analysis reveals these rationales to be complex and potentially difficult for rivals to decipher. It also recasts each component of the dominant awareness-motivation-capability (AMC) model of rivalry, suggesting that awareness is challenged by subtle rationales, motivation drives not only action but also forbearance, and capability is both a requirement and product of action.

scholarly journals Does It Pay to Compete Aggressively? Contingent Roles of Internal and External Resources

2016 ◽  
Vol 45 (2) ◽  
pp. 620-644 ◽  
Author(s):  
Goce Andrevski ◽  
Walter J. Ferrier
Keyword(s):  
Polynomial Regression ◽  
Competitive Dynamics ◽  
Dense Network ◽  
External Resources ◽  
Competitive Aggressiveness ◽  
Competitive Dynamics Research ◽  
Alliance Partners ◽  
And Performance ◽  
Computer Aided Software Engineering ◽  
The Relationship

We examine, in hypercompetitive environments, why some firms fail to benefit from competitive aggressiveness while others experience superior profits. We explore the relationship between competitive aggressiveness and performance in a sample of 141 firms from three hypercompetitive industries—personal computers, computer-aided software engineering, and semiconductors—from 1995 to 2006. Contrary to the predominant view within competitive dynamics research, we find that competitive aggressiveness is not a universally effective strategy. For some firms, excessive competitive aggressiveness can escalate costs and diminish performance. Using polynomial regression analysis and response surface methodology, we identify the conditions under which competitive aggressiveness enhances firm performance. Our findings reveal that firms benefit from competitive aggressiveness when they have specialized technological resources and support from a dense network of alliance partners.

Hygienic assessment of learning environment conditions (by the example of higher educational institutions of the city of Ufa)

2020 ◽  
Vol 99 (4) ◽  
pp. 405-411
Author(s):  
Elena Ju. Gorbatkova
Keyword(s):  
Ionizing Radiation ◽  
Educational Institutions ◽  
Higher Educational Institutions ◽  
Factors Affecting ◽  
Republic Of Bashkortostan ◽  
Average Relative Humidity ◽  
Higher Educational ◽  
The Republic ◽  
And Performance ◽  
The City

Introduction. The important factors affecting health and performance of young people are the conditions of education, in particular, a comfortable microclimate in the classrooms of higher educational institutions. Materials and methods. In view of the urgency of this problem, an analysis was made of the microclimate parameters of educational organizations of different profiles (Ufa city, the Republic of Bashkortostan). 294 classrooms were studied in 22 buildings of 4 leading universities in Ufa. A total of 3,822 measurements were taken to determine the parameters of the microclimate. The analysis of ionizing radiation in the aerial environment of classrooms. There was performed determination of radon and its affiliated products content. In order to assess the conditions and lifestyle of students of 4 higher educational institutions of the city of Ufa, we conducted an anonymous survey of 1,820 students of I and IV years of education. Results. The average temperature in the classrooms of all universities studied was 23.9±0.09 C. The average relative humidity in all classrooms was 34.2 ± 0.42%. Analysis of ionizing radiation (radon and its daughter products decay) in the aerial environment of the classrooms and sports halls located in the basement determined that the average annual equivalent equilibrium volumetric activity of the radon daughter products (EROA ± Δ222Rn) ranged from 28 ± 14 to 69 ± 34.5 meter, which meets the requirements established by SanPiN. Conclusion. The hygienic assessment of the microclimate parameters of educational institutions of various profile revealed a number of deviations from the regulated norms. The results indicate the need to control the parameters of the microclimate, both from the administration of universities, and from the professors. According to the results of the study, recommendations were prepared for the management of higher educational institutions in Ufa.

Analysis of Financial Performance of Public Sector Banks in India: CAMEL

2020 ◽  
pp. 097674792096686
Author(s):  
Yudhvir Singh ◽  
Ram Milan
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Positive Impact ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Factors Affecting ◽  
Public Sector Banks ◽  
The Government ◽  
And Performance ◽  
Asset Quality

Public sector banks have been merged by the government in the last few years. This is the rationale behind conducting this study. The purpose of this article is to determine the factors affecting the performance of public sector banks in India and the interrelationship between bank-specific determinants and performance of public sector banks. In this article, we shall analyse the financial data of all the public sector commercial banks for a period spread across 11 years (2009–2019); Capital adequacy, Assets quality, Management efficiency, Earning, and Liquidity (CAMEL) has been used as a performance determinant; system generalised method of moments (GMM) analysis has been used to find the effect of determinants on the performance measurement of public sector banks; and CCA (canonical correlation analysis) has been used to find the interrelationship between the bank-specific determinants and the performance of public sector banks. The finding has important implications in terms of performance in the banking sector. Certain limitations of this study are: It is based on secondary data. The study only covers the financial aspects and not the non-financial aspects. It is found that the asset quality is negatively related with performance of public sector banks. Liquidity and inflation are inversely related to performance of public sector banks in India. Capital adequacy is positively related with banks’ performance, but inversely related with banks’ interest margin. GDP growth has a significant positive impact on banks’ performance, but inversely related with banks’ interest income. Inflation rate is inversely related with banks’ performance. Banking sector reforms are insignificantly related with banks’ performance.

Fish Price Determination Around Lake Victoria, Tanzania: Analysis of Factors Affecting Fish Landing Price

2021 ◽  
Vol 22 (2) ◽  
pp. 348-363
Author(s):  
Damian Boniface Sambuo ◽  
Stephen Kirama ◽  
Kitala Malamsha
Keyword(s):  
Lake Victoria ◽  
Regulatory Body ◽  
Price Determination ◽  
Cross Sectional ◽  
Factors Affecting ◽  
Fish Market ◽  
Fishery Policy ◽  
The Government ◽  
And Performance

Determination of fish landing price is important, as the same contributes to the structure, conduct and performance of the fish market in Lake Victoria. Determination of relevant landing price is a gap to console between fishermen, agents (middlemen), processors and the government. The main objective of this study was therefore to examine fish price determination. Specifically, to examine the methods for fish price determination and analyse factors that affect fish landing price in Lake Victoria, a cross-sectional design was employed, and 300 respondents were randomly selected from two district councils, namely, Sengerema and Buchosa. Both qualitative and quantitative data were analysed using descriptive statistics and inferential analysis. Findings show that landing price is determined through formal negotiation with processors, consultation with other traders, informal negotiation with buyers and Beach Management Unit (BMU). The study concluded that these are the common methods used to determine landing prices. Also, distance from fishing to onshore landing centres, market information channels, age and experiences of the fishermen are the factors significantly found affecting landing price. It is recommended that the mechanism for setting up fishery price, fish market structure, fishery information and the formation of fishery regulatory body needs fishery policy and sector reforms that mark the determination of fish landing price.

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