Description
Dynamic capability as "the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments."[1] Dynamic capabilities can be distinguished from operational capabilities, which pertain to the current operations of an organization.
Competitive Dynamics
Ch5-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch5-2
Factors Leading to More Complex Rivalry
Declining emphasis on single, domestic markets and increasing emphasis on global markets Advances in communication technology make coordination easier across multiple markets Advances in technology and innovation have increased competitiveness of small and medium sized firms National barriers are falling due to the number and scope of trade agreements (GATT, NAFTA, EEC)
Ch5-3
Competitive Dynamics
Results from a series of competitive actions and competitive responses among firms competing within a particular industry
Competitive Rivalry
Exists when two or more firms jockey with one another in the pursuit of better market position
Ch5-4
A firm’s strategic conduct is dynamic in nature
Actions taken by one firm elicit responses from competitors
Competitive Dynamics
Actions and responses shape the competitive positions of each firm’s business level strategy
Competitive responses lead to additional actions from the firm that acted originally
Ch5-5
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-6
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior
Awareness
Motivation
Do managers understand the key characteristics of competitors?
Capability
Ch5-7
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation Does the firm have appropriate incentives to attack or respond?
Capability
Ch5-8
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation
Capability
Does the firm have the necessary resources to attack or respond?
Ch5-9
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-10
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Do firms compete with each other in multiple markets?
Ch5-11
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Multipoint competition tends to reduce competitive interactions, but increases the likelihood of response where interaction occurs
For example, airlines price flights similarly but respond quickly when competitors introduce promotional prices
Ch5-12
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Do competitors possess similar types or amounts of resources?
Ch5-13
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Firms are less inclined to attack a firm that is likely to retaliate Firms with similar resources are more likely to be aware of each other’s competitive moves
Firms with dissimilar resources are more likely to attack
Ch5-14
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-15
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response
Interfirm Rivalry:
Attack & Response Likelihood of Attack First Mover advantage First Mover Incentives can be substantial Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ch5-16
First Mover
Firms that take an initial competitive action Generally possess the resources and capabilities that enable them to be pioneers in new products, new markets or new technologies
Can earn above average profits until competitors respond
Gain customer loyalty, helping to create a barrier to entry by competitors Advantage depends upon difficulty of imitation
Ch5-17
Second Mover
Firms that respond to a First Mover’s actions Second Movers frequently imitate First Movers Speed of response often dictates success
Should evaluate customers’ response before moving “Fast” Second Movers can capture some of initial customers and develop some brand loyalty Avoid some of the risks associated with First Move
Must possess necessary capabilities to imitate
Ch5-18
Model of Interfirm Rivalry: Likelihood of Attack and Response
Interfirm Rivalry:
Attack & Response Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability Whether a competitor is likely to respond depends on several key factors
Ch5-19
Types of Competitive Actions
Strategic Actions
Example
Significant commitments of specific and distinctive organizational resources Difficult to implement Difficult to reverse
Major Acquisition
Undertaken to “fine tune” strategy Relatively easy to implement Relatively easy to reverse
Tactical Actions
Example
Price cut
Ch5-20
Gauging the Likelihood of Response
Type of Competitive Action -Tactical or Strategic Easier to respond to Require fewer resources to mount a response
Actor’s Reputation
Market leaders are more likely to be copied “Risk taking” firms are less likely to be copied “Price Predators” are less likely to be copied
Ch5-21
Gauging the Likelihood of Response
Market Dependence
Firms that are more dependent on a single industry are more likely to respond than are diversified firms
Industry dependent firms will likely respond to either strategic or tactical actions
Competitor Resources
Smaller firms are more likely to respond to tactical actions
Limited resources may lead to alternatives such as Strategic Alliances
Ch5-22
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-23
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Ch5-24
Firm size can have opposing effects on competitive dynamics
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Large firms may exert market power over rivals and erect barriers to entry against smaller competitors However, smaller competitors may be more nimble and innovative “Think and act big and we’ll get
smaller. Think and act small and we’ll get bigger.” -- Herb Kelleher,
CEO, Southwest Airlines
Ch5-25
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Ch5-26
Quick response is crucial to both the first mover and the fast second mover
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality Consistent innovation is required for market leadership in many dynamic industries
Ch5-27
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality Exceeding customer expectations is a necessity to compete in the 21st century
Ch5-28
Quality Dimensions of Goods & Services
Product Quality Dimensions:
Performance Features Flexibility Durability Conformance Serviceability Aesthetics Operating characteristics Important special characteristics Meeting operating specifications over time Amount of use before performance deteriorates Match with pre-established standards Ease and speed of repair or normal service How a product looks and feels
Perceived quality Subjective assessment of characteristics (product image)
Ch5-29
Quality Dimensions of Goods & Services
Service Quality Dimensions:
Timeliness Courtesy Performed in promised period of time Performed cheerfully
Consistency
Convenience Completeness Accuracy
Giving all customers similar experiences
Accessibility to customers Fully serviced, as required Performed correctly each time
Ch5-30
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-31
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Competitive Market Types Slow cycle markets are
Slow, Standard or Fast Cycle
Competitive Outcomes
Sustained Competitive Advantage Temporary Advantage
frequently shielded by monopoly power or very strong brand loyalties
This market outcome and lack of interfirm rivalry may lead to sustained competitive advantage
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Ch5-32
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Standard cycle markets Competitive Market Types often lead to highly Slow, Standard or Fast Cycle competitive pressures Competitive Outcomes despite world class products Sustained Competitive Advantage Firms with multimarket Temporary Advantage competition may dampen rivalry somewhat Evolutionary Outcomes Evolutionary Actions Growth-Oriented Actions Market-Power Actions Sustained competitive advantage is a possible outcome in this instance Ch5-33
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Fast cycle markets are Competitive Market Types intensely dynamic and a Slow, Standard or Fast Cycle first mover advantage is Competitive Outcomes often unsustainable Sustained Competitive Advantage Temporary Advantage Firms may cannibalize older generation products while introducing new innovative premium products Sustainable competitive advantage is unilkely Ch5-34
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Gradual Erosion of a Sustained Competitive Advantage
Returns from a Sustained Competitive Advantage
Exploitation Counterattack Launch
Time (years)
10
Ch5-35
Some Firms Maintain Competitive Advantage in Fast-Cycle Markets by Seizing the Initiative 1 Disrupting the Status Quo
Identify new opportuntites to serve the customer by shifting the rules of competition through speed and variety
2 Creating Temporary Advantage
Use superior knowledge of the customer, technology and the future to enhance customer orientation and empower workers Move aggressively into new areas of competition to create new advantage and undermine a competitor’s old advantage Take several actions in a row in order to seize the initiative and create momentum to develop new advantages
3 Seizing the Initiative
4 Sustaining the Momentum
Ch5-36
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-37
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Firm has already moved on to Advantage No. 2
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-38
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Firm continues to move on to the next Advantage
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-39
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Strategies may be deterCompetitive Market Types mined by the life cycle of Slow, Standard or Fast Cycle the industry
Competitive Outcomes
Sustained Competitive Advantage Temporary Advantage
Younger firms and emerging industries are generally characterized by entrepreneurial actions Growth-oriented and Market-power strategies dominate established or mature industries Ch5-40
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-41
Competitor Analysis
Market Commonality Resource Similarity
Feedback
An Action-Based Model of the Industry Life Cycle
Key Task Key Task Key Task
Firm Resource & Market Strength
Exploiting Open Niches (Blind Spots) and Competitive Uncertainty
Exploiting Factors of Production
Exploiting Market Position
Market-Power Actions
Growth-Oriented Actions Entrepreneurial Actions
Emerging Stage
Growth Stage
Mature Stage
Ch5-42
Time
doc_507762472.ppt
Dynamic capability as "the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments."[1] Dynamic capabilities can be distinguished from operational capabilities, which pertain to the current operations of an organization.
Competitive Dynamics
Ch5-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch5-2
Factors Leading to More Complex Rivalry
Declining emphasis on single, domestic markets and increasing emphasis on global markets Advances in communication technology make coordination easier across multiple markets Advances in technology and innovation have increased competitiveness of small and medium sized firms National barriers are falling due to the number and scope of trade agreements (GATT, NAFTA, EEC)
Ch5-3
Competitive Dynamics
Results from a series of competitive actions and competitive responses among firms competing within a particular industry
Competitive Rivalry
Exists when two or more firms jockey with one another in the pursuit of better market position
Ch5-4
A firm’s strategic conduct is dynamic in nature
Actions taken by one firm elicit responses from competitors
Competitive Dynamics
Actions and responses shape the competitive positions of each firm’s business level strategy
Competitive responses lead to additional actions from the firm that acted originally
Ch5-5
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-6
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior
Awareness
Motivation
Do managers understand the key characteristics of competitors?
Capability
Ch5-7
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation Does the firm have appropriate incentives to attack or respond?
Capability
Ch5-8
Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation
Capability
Does the firm have the necessary resources to attack or respond?
Ch5-9
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-10
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Do firms compete with each other in multiple markets?
Ch5-11
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Multipoint competition tends to reduce competitive interactions, but increases the likelihood of response where interaction occurs
For example, airlines price flights similarly but respond quickly when competitors introduce promotional prices
Ch5-12
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Do competitors possess similar types or amounts of resources?
Ch5-13
Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity
Firms are less inclined to attack a firm that is likely to retaliate Firms with similar resources are more likely to be aware of each other’s competitive moves
Firms with dissimilar resources are more likely to attack
Ch5-14
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-15
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response
Interfirm Rivalry:
Attack & Response Likelihood of Attack First Mover advantage First Mover Incentives can be substantial Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ch5-16
First Mover
Firms that take an initial competitive action Generally possess the resources and capabilities that enable them to be pioneers in new products, new markets or new technologies
Can earn above average profits until competitors respond
Gain customer loyalty, helping to create a barrier to entry by competitors Advantage depends upon difficulty of imitation
Ch5-17
Second Mover
Firms that respond to a First Mover’s actions Second Movers frequently imitate First Movers Speed of response often dictates success
Should evaluate customers’ response before moving “Fast” Second Movers can capture some of initial customers and develop some brand loyalty Avoid some of the risks associated with First Move
Must possess necessary capabilities to imitate
Ch5-18
Model of Interfirm Rivalry: Likelihood of Attack and Response
Interfirm Rivalry:
Attack & Response Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability Whether a competitor is likely to respond depends on several key factors
Ch5-19
Types of Competitive Actions
Strategic Actions
Example
Significant commitments of specific and distinctive organizational resources Difficult to implement Difficult to reverse
Major Acquisition
Undertaken to “fine tune” strategy Relatively easy to implement Relatively easy to reverse
Tactical Actions
Example
Price cut
Ch5-20
Gauging the Likelihood of Response
Type of Competitive Action -Tactical or Strategic Easier to respond to Require fewer resources to mount a response
Actor’s Reputation
Market leaders are more likely to be copied “Risk taking” firms are less likely to be copied “Price Predators” are less likely to be copied
Ch5-21
Gauging the Likelihood of Response
Market Dependence
Firms that are more dependent on a single industry are more likely to respond than are diversified firms
Industry dependent firms will likely respond to either strategic or tactical actions
Competitor Resources
Smaller firms are more likely to respond to tactical actions
Limited resources may lead to alternatives such as Strategic Alliances
Ch5-22
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-23
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Ch5-24
Firm size can have opposing effects on competitive dynamics
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Large firms may exert market power over rivals and erect barriers to entry against smaller competitors However, smaller competitors may be more nimble and innovative “Think and act big and we’ll get
smaller. Think and act small and we’ll get bigger.” -- Herb Kelleher,
CEO, Southwest Airlines
Ch5-25
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality
Ch5-26
Quick response is crucial to both the first mover and the fast second mover
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality Consistent innovation is required for market leadership in many dynamic industries
Ch5-27
Model of Interfirm Rivalry: Likelihood of Attack and Response
Ability for Action and Response
Relative Size Speed Innovation Quality Exceeding customer expectations is a necessity to compete in the 21st century
Ch5-28
Quality Dimensions of Goods & Services
Product Quality Dimensions:
Performance Features Flexibility Durability Conformance Serviceability Aesthetics Operating characteristics Important special characteristics Meeting operating specifications over time Amount of use before performance deteriorates Match with pre-established standards Ease and speed of repair or normal service How a product looks and feels
Perceived quality Subjective assessment of characteristics (product image)
Ch5-29
Quality Dimensions of Goods & Services
Service Quality Dimensions:
Timeliness Courtesy Performed in promised period of time Performed cheerfully
Consistency
Convenience Completeness Accuracy
Giving all customers similar experiences
Accessibility to customers Fully serviced, as required Performed correctly each time
Ch5-30
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-31
Competitor Analysis
Market Commonality Resource Similarity
Feedback
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Competitive Market Types Slow cycle markets are
Slow, Standard or Fast Cycle
Competitive Outcomes
Sustained Competitive Advantage Temporary Advantage
frequently shielded by monopoly power or very strong brand loyalties
This market outcome and lack of interfirm rivalry may lead to sustained competitive advantage
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Ch5-32
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Standard cycle markets Competitive Market Types often lead to highly Slow, Standard or Fast Cycle competitive pressures Competitive Outcomes despite world class products Sustained Competitive Advantage Firms with multimarket Temporary Advantage competition may dampen rivalry somewhat Evolutionary Outcomes Evolutionary Actions Growth-Oriented Actions Market-Power Actions Sustained competitive advantage is a possible outcome in this instance Ch5-33
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Fast cycle markets are Competitive Market Types intensely dynamic and a Slow, Standard or Fast Cycle first mover advantage is Competitive Outcomes often unsustainable Sustained Competitive Advantage Temporary Advantage Firms may cannibalize older generation products while introducing new innovative premium products Sustainable competitive advantage is unilkely Ch5-34
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Gradual Erosion of a Sustained Competitive Advantage
Returns from a Sustained Competitive Advantage
Exploitation Counterattack Launch
Time (years)
10
Ch5-35
Some Firms Maintain Competitive Advantage in Fast-Cycle Markets by Seizing the Initiative 1 Disrupting the Status Quo
Identify new opportuntites to serve the customer by shifting the rules of competition through speed and variety
2 Creating Temporary Advantage
Use superior knowledge of the customer, technology and the future to enhance customer orientation and empower workers Move aggressively into new areas of competition to create new advantage and undermine a competitor’s old advantage Take several actions in a row in order to seize the initiative and create momentum to develop new advantages
3 Seizing the Initiative
4 Sustaining the Momentum
Ch5-36
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-37
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Firm has already moved on to Advantage No. 2
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-38
Obtaining Temporary Advantages to Create Sustained Advantage
Returns from a Sustained Competitive Advantage
Firm continues to move on to the next Advantage
Exploitation Launch
Counterattack
5
Time (years) 10
15
Ch5-39
Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes
Strategies may be deterCompetitive Market Types mined by the life cycle of Slow, Standard or Fast Cycle the industry
Competitive Outcomes
Sustained Competitive Advantage Temporary Advantage
Younger firms and emerging industries are generally characterized by entrepreneurial actions Growth-oriented and Market-power strategies dominate established or mature industries Ch5-40
Evolutionary Outcomes
Evolutionary Actions Growth-Oriented Actions Market-Power Actions
Model of Interfirm Rivalry: Likelihood of Attack and Response
Drivers of Competitive Behavior
Awareness Motivation Capability
Interfirm Rivalry:
Attack & Response
Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability
Ability for Action and Response
Relative Size Speed Innovation Quality
Outcomes
Competitive Market Types Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Entrepreneurial Growth-Oriented or Market-Power Actions Ch5-41
Competitor Analysis
Market Commonality Resource Similarity
Feedback
An Action-Based Model of the Industry Life Cycle
Key Task Key Task Key Task
Firm Resource & Market Strength
Exploiting Open Niches (Blind Spots) and Competitive Uncertainty
Exploiting Factors of Production
Exploiting Market Position
Market-Power Actions
Growth-Oriented Actions Entrepreneurial Actions
Emerging Stage
Growth Stage
Mature Stage
Ch5-42
Time
doc_507762472.ppt