Global Competitive Dynamics

8
Chapter 8
Global
chapter
Competitive
Dynamics
GlobalGlobal Strategy
Strategic Management
Mike W. Peng
Mike W. Peng
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strategy as Action
Source: C. M. Grimm & K. G. Smith, 1997, Strategy as Action: Industry

Figure 8.1
Rivalry and Coordination (p. 62), Cincinnati: Thomson South-Western.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Industry-based considerations Resource-based considerations
• Concentration • Valuable capabilities to attack,
deter and retaliate
• Industry leader
• Product homogeneity • Rarity of certain assets
• Stability of demand and supply • Imitability of competitive actions
• Entry barriers • Organizational skills for actions
• Market commonality with rivals • Resource similarity with rivals
Competitive
A Comprehensive dynamics
Model of Global Attack/Counterattack

Cooperation
Competitive Dynamics
Institution-based considerations
• Domestic competition: Primarily

competition/antitrust policy
• International competition: Primarily
trade/antidumping policy
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
A Prisoners’ Dilemma for Airlines and Payoff Structure
(assuming a total of 200 passengers)
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
Figure 8.3
posted to a publicly accessible website, in whole or in part.
Industry Characteristics and Possibility
of Collusion vis-à-vis Competition
COLLUSION POSSIBLE COLLUSION DIFFICULT (COMPETITION LIKELY)
 Few firms (high concentration)  Many firms (low concentration)
 Existence of an industry price leader  No industry price leader
 Homogeneous products  Heterogeneous products
 High entry barriers  Low entry barriers

 High market commonality (mutual forbearance)  Lack of market commonality (no mutual
forbearance)
Copyright © 2014 Cengage Learning. All Rights Reserved. May not

be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part. Table 8.1
A Framework for Competitor Analysis
Between a Pair of Rivals
Sources: Adapted from (1) M. Chen, 1996, Competitor analysis and interfirm rivalry: Toward a theoretical integration (p. 108), Academy of
Management Review, 21: 100–134 and (2) J. Gimeno & C. Y. Woo, 1996, Hypercompetition in a multimarket environment: The role of
strategic similarity and multimarket contact in competitive de-escalation (p. 338), Organization Science, 7: 322–341.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, Figure 8.4
or posted to a publicly accessible website, in whole or in part.
Three Main Types of Attack
Thrust Feint
Attacks
Gambit
Copyright © 2014 Cengage Learning. All Rights Reserved. May not

be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Thrust
Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain
spheres of influence: Resource diversion strategies (p. 729), Academy of Management Review, 23: 724–740.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or Figure 8.7
Feint
spheres of influence: Resource diversion strategies (p. 731), Academy of Management Review, 23: 724–740.
Gambit
spheres of influence: Resource diversion strategies (p. 733), from Academy of Management Review, 23: 724–740.
Copyright © 1998. Reprinted by permission of Academy of Management Review via Copyright Clearance Center.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted Figure 8.9
to a publicly accessible website, in whole or in part.
How Local Firms in
Emerging Economies
Respond to
MNE Actions
Source: Adapted from N. Dawar & T. Frost, 1999, Competing with giants: Survival strategies for
local companies in emerging markets (p. 122), Harvard Business Review, March-April: 119–129.

Global Competitive Dynamics

Uploaded by

Copyright:

Available Formats

Global Competitive Dynamics

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Global Competitive Dynamics

Uploaded by

Copyright:

Available Formats

8

Source: C. M. Grimm & K. G. Smith, 1997, Strategy as Action: Industry

Model of Global Attack/Counterattack

• Domestic competition: Primarily

COLLUSION POSSIBLE COLLUSION DIFFICULT (COMPETITION LIKELY)

 Few firms (high concentration)  Many firms (low concentration)

 Existence of an industry price leader  No industry price leader

 Homogeneous products  Heterogeneous products

 High entry barriers  Low entry barriers

Copyright © 2014 Cengage Learning. All Rights Reserved. May not

Copyright © 2014 Cengage Learning. All Rights Reserved. May not

You might also like