Discuss competitor behavior and competitive dynamics.
A firm must understand their position in the market place against a competitor. A competitor is a firm that offers a related product that targets similar customers (Hitt, Hoskisson, & Ireland, 2017). Therefore, a firm necessitates an understanding of the competitor behavior and competitive dynamics of the competitors in the marketplace. Competitor behavior occurs when firms have a market commonality and resource similarity (Hitt et al., 2017). The results of the competitive behavior are elicited by the response and actions a firm takes that engages competitive rivalry. The drivers that encourage competitive behavior is based on awareness, motivation, and ability.
• Awareness: Occurs when a firm understands the consequences of its competitor’s moves.
• Motivation: Represents how a firm takes action, or not when knowing as it relates to the competitor. Although aware, a firm may not take action if it is not advantageous.
• Ability: Is the capacity the firm can choose to respond or not take action. The strength of a firm is contingent on its resources to engage in response or tactics. Also, in understanding the firm’s ability to gain or lose against the competitor.
Competitive behavior is more focused and engaged on the competitor. However, competitive dynamics is not looking at competing rivals with similar resources or market commonality. It includes all firms competing in the market for an advantageous position (Hitt et al., 2017). Competitive dynamics differ in that rate of competitive speed in the different markets. It is either at a slow-rate, fact-cycle, or standard-cycle market. A firm will need to grasp the firm’s pace to sustain or advance the business overall in the marketplace.
Hitt, H. A., Hoskisson, R. E., & Ireland, R. D. (2017). Strategic management: Concepts and cases: competitiveness and globalization(12thed.). Boston, MA: Cengage. ISBN: 7781305502147
Prompt: Discuss competitor behavior and competitive dynamics. Include a definitions of competitors and of competitive behavior.
Answer preview:
Words: 161