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MGMT 466 - Ch 5
Competitive Rivalry and Competitive Dynamics
32
Management
Undergraduate 4
10/15/2009

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Term
competitors
Definition
firms operating in the same market, offering similar products, and targeting similar customers
Term
competitive rivalry
Definition
__ is the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position. a multimarket firm is less likely to initiate an attack, but very likely to respond. thus, multimarket presences reduces competitive rivalry
Term
competitive behavior
Definition
__ is the set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position
Term
multimarket competition
Definition
__ occurs when firms compete against each other in several product or geographic markets
Term
competitive dynamics
Definition
__ refer to all competitive behaviors--that is, the total set of actions and responses taken by all firms competing within a market
Term
market commonality
Definition
__ is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each
Term
resource similarity
Definition
__ is the extent to which the firm's tangible and intangible resources are comparable to a competitor's in terms of both type and amount. firms with similar types and amounts of resources are likely to have similar strengths and weaknesses and use similar strategies.
Term
awareness (drivers of competitive actions and responses)
Definition
__, which is a prerequisite to any competitive action/response, refers to the extent to which competitors recognize the degree of their mutual interdependencies that results from market commonality and resource similarity. this is higher when firms have highly similar resources. excessive amounts of this can lead to excessive competition, resulting in a negative effect on all competitor's performance.
Term
motivation (drivers of competitive actions and responses)
Definition
__, which concerns the firm's incentive to take action or to respond to a competitor's attack, relates to perceived gains and losses. lower market commonality increases this (and vise versa).
Term
ability (drivers of competitive actions and responses)
Definition
__ relates to each firm's resources and the flexibility they provide. without available resources, the firm lacks this. this will be similar among firms if resources are similar
Term
resource dissimilarity (drivers of competitive actions and responses)
Definition
__ also influences competitive actions and responses between firms, in that "the greater is the resource imbalance between the acting firm and the competitors, the greater will be the delay in response" by the second firm. local competitors can't marshal needed resources, but they should still respond.
Term
competitive action
Definition
a __ is a strategic or tactical action the firm takes to build or defend its competitive advantages or improve its market position
Term
competitive response
Definition
a __ is a strategic or tactical action the firm takes to counter the effects of a competitor's competitive action
Term
strategic action/response
Definition
a __ is a market-based move that involves a significant commitment of organizational resources and is difficult to implement and reverse (R&D, radical design change)
Term
first mover
Definition
a __ is a firm that takes an initial competitive action in order to build or defend its competitive advantages or to improve its market position. this is especially effective in fast cycle markets. gain customer loyalty and market share.
Term
slack (1st mover)
Definition
organizational __ is the buffer or cushion provided by actual or obtainable resources that aren't currently in use and are in excess of the minimum resources needed to produce a given level of organizational output
Term
second mover
Definition
a __ is a firm that responds to the first mover's competitive action, typically through imitation. more cautious than the first mover, the second mover studies customers' reactions to product innovations. often, successful imitation allows this firm to avoid both the mistakes and the huge spending of the first movers.
Term
late mover
Definition
a __ is a firm that responds to a competitive action a significant amount of time after the first mover's action and the second mover's response. typically, this is better than no response at all, although success tends to be a lot less
Term
quality
Definition
__ exists when the firm's goods or services meet or exceed customers' expectations. a competitor with not much of this can be expected to face declines in sales revenue
Term
1. first mover incentives 2. organizational size 3. quality
Definition
3 facets of likelihood of attack
Term
1. type of competitive action 2. actor's reputation 3. dependence on the market
Definition
3 facets of likelihood of response
Term
type of competitive action (likelihood of response)
Definition
strategic actions elicit fewer total competitive responses because strategic responses (such as market based moves) involve a significant commitment of resources and are difficult to implement and reverse. the time needed to asses and implement a strategic action can delay the competitor's response to that action. in contrast, a competitor will respond quickly to a tactical action (price matching)
Term
actor's reputation (likelihood of response)
Definition
the __ is the positive or negative attribute ascribed by one rival to another based on past competitive behavior
Term
dependence on the market (likelihood of response)
Definition
__ denotes the extent to which a firm's revenues or profits are derived from a particular market.
Term
1. slow-cycle 2. fast-cycle 3. standard cycle markets
Definition
3 types of competitive markets (competitive dynamics)
Term
slow-cycle markets
Definition
__ markets are those in which the firm's competitive advantages are shielded from imitation commonly for long periods of time and where imitation is costly. competitive advantages are sustainable in these markets. patents, copyrights, regulatory requirements. (pharmaceuticals)
Term
fast-cycle markets
Definition
__ are markets in which the firm's capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often rapid and inexpensive. reverse engineering leads facilitates rapid imitation. these markets are more volatile.
Term
standard-cycle markets
Definition
__ are markets in which the firm's competitive advantages are moderately shielded from imitation and where imitation is costly. these companies serve many customers in competitive markets
Term
1. market commonality 2. resource similarity
Definition
2 facets of competitor analysis
Term
1. performance 2. features 3. flexibility 4. conformance 5. serviceability 6. durability 7. aesthetics 8. perceived quality
Definition
product quality dimensions (8)
Term
1. timeliness 2. courtesy 3. consistency 4. convenience 5. completeness 6. accuracy
Definition
service quality dimensions (6)
Term
tactical action/response
Definition
a __ is a market-based move that involves fewer resources to fine-tune a strategy that is already in place (change price, add new functions to an existing product)
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