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Competitive
Rivalry and
Competitive
Dynamics
Figure 1.1
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Western.
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2004 South-Western. reserved.
All rights reserved.
Definitions
Competitors
Firms operating in the same market, offering
similar products and targeting similar customers
Competitive rivalry
The ongoing set of competitive actions and
responses occurring between competitors
Competitive rivalry influences an individual firms
ability to gain and sustain competitive
advantages
SOURCE: Adapted from M.-J. Chen, 1996, Competitor analysis and interfirm rivalry:
Figure 5.1
Copyright 2004 South- 57
Toward a theoretical integration, Academy of Management Review, 21: 100134.
Figure 5.3
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Western. All rights reserved.
Drivers of Competitive Behavior
Awareness Awareness is
the extent to which
competitors recognize
the degree of their
mutual interdependence
that results from:
Market commonality
Resource similarity
SOURCES: Adapted from J.W. Dean, Jr., & J. R. Evans, 1994, Total Quality: Management, Organization and Society, St.
Paul, MN:West Publishing Company; H.V. Roberts & B. F. Sergesketter, 1993, Quality Is Personal, New York:The Free
Table 5.1b
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Press; D. Garvin, 1988, Managed Quality: The Strategic and Competitive Edge, New York:The Free Press.
530
Western. All rights reserved.
Factors Affecting Likelihood of
Response
Firms study three other factors to predict
how a competitor is likely to respond to
competitive actions:
Type of competitive action
Reputation
Market dependence