Discuss the expected competitive dynamics among firms
When organizations have a friendly line of competition, it can have positive benefits for the company and sometimes the competitor. Competitive dynamics include the behaviors and responses of all the competing firms in a market. While competitive behavior looks at the firms individually, competitive dynamics look at the market as a whole which will include all of the competing firms. In the competing world, there are three types of markets: slow-cycle, fast-cycle, and standard-cycle market. A slow-cycle market is a market where the firm’s competitive advantages are protected from imitation and imitation is costly. A fast-cycle market is one whose firm’s advantages are not protected from imitation and the cost of imitating is inexpensive. This imitation can be done through reverse engineering or technology changes. In a standard-cycle market, a firm’s competitive advantages are somewhat protected from imitation, but imitation can be somewhat costly. In a slow-cycle market, competitive dynamics can be low.
Colossians 3:23 (Eastern Standard Version) declares, “Whatever you do, work heartily, as for the Lord and not for men.” Company 1’s advantage is protected and costly to imitate, the other firms will not be as focused on imitating the product or service. Therefore, prices may also be high considering they are likely to be the only ones with that advantage. In a fast-cycle market, it will be easier for Company 2 and Company 3 to reproduce Company 1’s competitive advantage. 1’s result, prices will be lower because the three companies will be competing for business more. The standard-cycle market is different. Company 1’s competitive advantage is partially protecting and somewhat expensive; prices may or may not be negotiable. Company 2 may take the risk of trying to imitate Company 1’s product or service while Company 3 chooses not to. As a result, Company 1 only has one rival at this point, so prices can still be somewhat set to create a bigger profit.
Prompt: Competitive dynamics can be expected in all external environments. Discuss the expected competitive dynamics among firms competing in slow-cycle markets, fast-cycle markets, and standard-cycle markets.
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