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Unformatted text preview: Chapter 5: Competitive Rivalry and Competitive Dynamics Chapter 5 Competitive Rivalry and Competitive Dynamics KNOWLEDGE OBJECTIVES 1. Define competitors, competitive rivalry, competitive behavior, and competitive dynamics. 2. Describe market commonality and resource similarity as the building blocks of a competitor analysis. 3. Explain awareness, motivation, and ability as drivers of competitive behaviors. 4. Discuss factors affecting the likelihood a competitor will take competitive actions. 5. Discuss factors affecting the likelihood a competitor will respond to actions taken against it. 6. Explain competitive dynamics in slow-cycle, fast-cycle and standard-cycle markets. CHAPTER OUTLINE Opening Case Competition in Recessions: Let the Bad Times Roll A MODEL OF COMPETITIVE RIVALRY COMPETITOR ANALYSIS Market Commonality Resource Similarity DRIVERS OF COMPETITIVE ACTIONS AND RESPONSES Strategic Focus The Competitive Battle among Big Box Retailers: Wal-Mart Versus All the Others COMPETITIVE RIVALRY Strategic and Tactical Actions LIKELIHOOD OF ATTACK First-Mover Incentives Organizational Size Quality LIKELIHOOD OF RESPONSE Type of Competitive Action Actor’s Reputation Dependence on the Market COMPETITIVE DYNAMICS Slow-Cycle Markets Fast-Cycle Markets Strategic Focus Soothing the Soul with Kisses – Candy Kisses That Is Standard-Cycle Markets SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 5-1 Chapter 5: Competitive Rivalry and Competitive Dynamics LECTURE NOTES Chapter Introduction : The competitive landscape is characterized by increasing globalization, advanced technological development, and other factors that will lead to an environment that is more dynamic and charged with rivalry. Firms will act and react in a dance of sorts, but one involving very high stakes—even survival. This chapter introduces terms and concepts relevant to the conversation about competitive behavior in a variety of markets. Figure 5.2 is central to the discussion of most of the chapter. OPENING CASE Competition in Recessions: Let the Bad Times Roll Competitive rivalry often increases during recessions. When the economy is weak many people change the shopping behavior. People buy what they need but also look for ways to escape their daily negative environment.and find ways to experience some form of enjoyment. For example, box-office receipts for movies and home viewing of movies increased during the recession which began in 2008. Candy sales also increased in 2008 as people spent more discretionary income on something that brings them affordable pleasure. In fact, Dylan Lauren, owner of Dylan’s Candy Bar has noticed that candy sales have increased during numerous bad times including 9/11, war, and the falling stock market....
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This note was uploaded on 10/21/2011 for the course ACCOUNTING 101 taught by Professor Fenjimo during the Spring '11 term at College of Southern Idaho.
- Spring '11