4. 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.
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6. A Model of Competitive Rivalry Feedback Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
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8. A Model of Competitive Rivalry: Competitor Analysis Feedback Market Commonality Resource Similarity Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
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10. Competitor Analysis Competitor Analysis Multipoint competition tends to reduce competitive interactions, but increases likelihood of response where interaction occurs. For example, airlines price flights similarly, but respond quickly when competitors introduce promotional prices. Market Commonality Do firms compete with each other in multiple markets? Resource Similarity Do competitors possess similar types or amounts of resources?
11. A Model of Competitive Rivalry: Drivers of Competitive Behaviour Feedback Market Commonality Resource Similarity Awareness Motivation Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
12. Drivers of Competitive Behaviour Drivers of Competitive Behaviour * Does the firm have appropriate incentives to attack or respond? Do managers understand key characteristics of competitors? Motivation Awareness
13. A Model of Competitive Rivalry: Likelihood of Attack Market Commonality Resource Similarity Awareness Motivation Feedback Likelihood of Attack First Mover Incentives Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
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17. Quality Dimensions of Goods & Services Product Quality Dimensions: Performance Operating characteristics Features Important special characteristics Flexibility Meeting operating specifications over time Durability Amount of use before performance declines Conformance Match with pre-established standards Serviceability Ease and speed of repair or normal service Aesthetics How a product looks and feels Perceived Subjective assessment of characteristics (product image) quality
18. Quality Dimensions of Goods & Services Service Quality Dimensions: Timeliness Performed in promised period of time Courtesy Performed cheerfully Consistency Giving all customers similar experiences Convenience Accessibility to customers Completeness Fully serviced, as required Accuracy Performed correctly each time
19. A Model of Competitive Rivalry: Likelihood of Response Market Commonality Resource Similarity Awareness Motivation Feedback Likelihood of Attack First Mover Incentives Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis Likelihood of Response Competitive Action Type Dependence on Market Resource Availability Actor’s Reputation
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25. A Model of Competitive Rivalry: Outcomes Likelihood of Attack First Mover Incentives Likelihood of Response Competitive Action Type Dependence on Market Resource Availability Actor’s Reputation Feedback Market Position Financial Performance Market Commonality Resource Similarity Awareness Motivation Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
26. Outcomes * * Financial Performance Better position should lead to better financial performance Market Position Is the firm creating a sustained competitive advantage Outcomes
27. A Model of Competitive Rivalry: Competitive Dynamics / Feedback Competitive Dynamics: Slow, Standard & Fast Cycle Markets Likelihood of Attack First Mover Incentives Likelihood of Response Competitive Action Type Dependence on Market Resource Availability Actor’s Reputation Feedback Market Position Financial Performance Market Commonality Resource Similarity Awareness Motivation Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis
28. Competitive Dynamics Competitive Market Types Slow, Standard, Fast Cycle Feedback Slow cycle markets are frequently shielded by monopoly power or very strong brand loyalties A lack of interfirm rivalry may lead to sustained competitive advantage Slow , Standard, Fast, Cycle * *
29. Competitive Dynamics Competitive Market Types Slow, Standard, Fast Cycle Feedback Slow, Standard , Fast Cycle Firms with multi-market competition may dampen rivalry somewhat Sustained competitive advantage is a possible outcome in this instance Standard cycle markets often lead to highly competitive pressures despite world class products
30. Competitive Dynamics Competitive Market Types Slow, Standard, Fast Cycle Feedback Slow, Standard, Fast Cycle Fast cycle markets are intensely dynamic and a 1 st mover advantage is often unsustainable. Firms may cannibalize older generation product while introducing new innovative premium ones. Sustainable competitive advantage is unlikely.
31. Competitive Advantage Which Eventually Erodes Time (years) 5 Launch Exploitation Counterattack Returns from a Competitive Advantage
32. Obtaining Temporary Advantages to Create Sustained Advantage Time (years) 10 Launch Exploitation Counterattack Returns from a Competitive Advantage 5 15
33. Obtaining Temporary Advantages to Create Sustained Advantage Time (years) 10 Launch Exploitation Counterattack Returns from a Sustained Competitive Advantage 5 15 Firm has already moved on to Advantage No. 2
34. Obtaining Temporary Advantages to Create Sustained Advantage Time (years) 10 Launch Exploitation Counterattack Returns from a Sustained Competitive Advantage 5 15 Firm continues to move on to the next Advantage
35. A Model of Competitive Rivalry: Detailed Model Competitive Dynamics: Slow, Standard & Fast Cycle Markets Likelihood of Attack First Mover Incentives Likelihood of Response Competitive Action Type Dependence on Market Resource Availability Actor’s Reputation Feedback Market Position Financial Performance Market Commonality Resource Similarity Awareness Motivation Drivers of Competitive Behaviour Outcomes Interfirm Rivalry: Attack & Response Competitor Analysis