Ch05 Hitt SM8e final

Ch05 Hitt SM8e final - 1 Strategic Management Concepts and...

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Unformatted text preview: 1 Strategic Management: Concepts and Cases Part II: Strategic Actions: Strategy Formulation Chapter 5: Competitive Rivalry and Competitive Dynamics 2 The Strategic Management Process 3 Chapter 5: Competitive Rivalry and Competitive Dynamics Overview: Six content areas Competitors, competitive rivalry, competitive behavior and competitive dynamics Market commonality and resource similarity: Building blocks of competitor analysis Competitive actions: Awareness, motivation and ability Factors driving competitor’s competitive actions Competitor’s response to actions taken against it Competitive dynamics in slow, fast and standard- cycle markets 4 Competition Between HP and Dell: The Battle Rages On Dell lost position as global top-seller of PCs End of 2006: HP 18.1% vs. Dell’s 14.7% 2005 and 2006: 32% overall decline in stock value Dell way: bypass middle-man and sell custom-built computers directly to consumer This single business model lowered costs and hence prices of products, no longer created value to the degree it had historically …. … Why? Competitive actions/reactions HP: found ways to innovate and reinvent itself – since it couldn’t compete with Dell in the direct-sales battlefield they used their strength and developed personal relationships with retailers Dell decides to venture into retail sales – a reaction to HP! 5 Chapter 5: Competitive Rivalry and Competitive Dynamics Overview: Six content areas Competitors, competitive rivalry, competitive behavior and competitive dynamics Market commonality and resource similarity: Building blocks of competitor analysis Competitive actions: Awareness, motivation and ability Factors driving competitor’s competitive actions Competitor’s response to actions taken against it Competitive dynamics in slow, fast and standard- cycle markets 6 Introduction and Definitions Competitors Firms operating in the same market, offering similar products and targeting similar customers Competitive Rivalry Ongoing set of competitive actions and competitive responses occurring between competitors as they contend with each other for an advantageous market position Competitive Behavior Set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position 7 Introduction and Definitions (Cont’d) Multimarket Competition Firms competing against one another in several product or geographic markets Competitive Dynamics Total set of actions and responses of all firms competing within a market 8 From Competitors to Competitive Dynamics 9 Chapter 5: Competitive Rivalry and Competitive Dynamics Overview: Six content areas Competitors, competitive rivalry, competitive behavior and competitive dynamics Market commonality and resource similarity: Building blocks of competitor analysis Competitive actions:...
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This note was uploaded on 03/14/2011 for the course WCOB 3016 taught by Professor Staff during the Spring '08 term at Arkansas.

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Ch05 Hitt SM8e final - 1 Strategic Management Concepts and...

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