CHAPTER 5.1.docx - o Competitor analysis first step a firm...

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o Competitor analysis: first step a firm takes in order to predict the extent and nature of its rivalry with each competitor. o Especially important when entering a foreign market in that firms doing so need to understand the local competition and foreign competitors currently operating in the market. o Market commonality: number of markets in which firms compete o Resource similarity: similarity in their resources Firms with high market commonality and resource similarity are direct and mutually acknowledged competitors. o What firms study to be able to predict competitor’s behavior in the form of their competitive actions and responses. Lacking information needed to predict competitor’s objective, strategies, assumptions and capabilities creates competitive blind spots. o Market commonality: every industry is composed of various markets. Concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each.
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