Presented by: Elements of the Competitive Dynamics and

Competitive Rivalry

AGUDERA, Dan Loyd D.C.

A. Competitors - firms operating in the
JOAQUIN, Vincent C. same market, offering similar products,
LOPEZ, Elisse Dren A. and targeting similar customers.

MEDINA, Jesus William C. B. Competitive Rivalry - the ongoing set of

competitive actions and competitive
SAN ANTONIO, Adrian Dave S. responses that occur among firms as
they maneuver for an advantageous
TAMAYO, Enrico A.
market position.

C. Competitive Action - the set of

Topics competitive actions and responses the
firm takes to build or defend its
competitive advantages and to improve
its market position.
I. Concept of Competitive Dynamics
D. Competitive Behavior - all competitive
II. Sources of Competitive Dynamics
behavior that is, the total set of actions
III. Characteristics of an Emerging Industry and responses taken by all firms
competing within a market.

E. Multimarket Competition - firms

competing against each other in several
product or geographic markets
COMPETITIVE DYNAMICS

Competitive Dynamics is the total set of Reasons why Companies Launch New
actions and responses taken by all firms Competitive Actions
competing within a market

a) Improve market position

b) Capitalize on growing demand

COMPETITIVE DYNAMICS VS.
c) Expand production capacity
COMPETITIVE RIVALRY
d) Provide an innovative new solution

e) Obtain first mover advantages

Competitive Dynamics are the ongoing
actions and responses taking place among all
firms competing within a market for
advantageous positions while Competitive
Rivalry are the ongoing actions and responses Competitive Analysis
taking place between an individual firm and its
competitors for advantageous market position.

Competitive Analysis used to help a

firm understand its competitors. With the
analysis, a firm is better able to predict
competitors’ behaviors when forming its
competitive actions and responses.
A. Market Commonality is concerned
with:
 The number of markets with
which a firm and a
competitor are jointly
involved
 The degree of importance of
the individual markets to
each competitor
B. Resource Similarity is concerned
with:
 How comparable the firm’s
tangible and intangible
resources are to a
competitor’s in terms of both
types and amounts
Sources of Competitive Dynamics (Drivers)
A. Awareness is the extent to which
competitors recognize the degree of
their mutual interdependence that
results from:
 Market commonality
 Resource similarity
B. Motivation concerns the firm’s
incentive to take action or to respond
to a competitor’s attack and relates
to perceived gains and losses.
C. Ability relates to
 each firm’s resources
 the flexibility these resources
provide
 Without available resources the
firm lacks the ability to attack a
competitor and respond to the
competitor’s actions
STRATEGIC ACTION VS.
TACTICAL ACTION
Strategic Action is a market-based
move that involves a significant commitment of
organizational resources and is difficult to
implement and reverse while Tactical Action is
a market-based move that is taken to fine-tune a
strategy that usually involves fewer resources
and is relatively easy to implement and reverse.
TYPES OF MOVERS
A. First Mover
 Firms that take an initial competitive
action.
 Generally possess the resources
and capabilities that enable them to
be pioneers in new products, new
markets or new technologies.
 Can earn above average profits until
competitors respond
 Gain customer loyalty, helping to
create a barrier to entry by
competitors
 Advantage depends upon difficulty of
imitation
B. Second Mover
 Firms that respond to a First Mover’s
actions
 Second Movers frequently imitate
First Movers
 Speed of response often dictates
success
 Should evaluate customers’
response before moving
  “Fast” Second Movers can capture Challenges of an Emerging Industry
some of initial customers and
develop some brand loyalty a) Acquisition of Raw Materials

 Avoid some of the risks associated b) Product Design due to lack of experts
with First Move c) Limited Marketing Challenges
 Must possess necessary d) Funding R&D and operations
capabilities to imitate

C. Late Mover
 Late mover responds to a
competitive action only after
considerable time has elapsed since
first and second movers have taken
action

 Any success achieved will be slow in

coming and much less than that
achieved by first and second movers

 Late mover’s competitive action

allows it to earn only average returns
and delays its understanding of how
to create value for customers

 Has substantially reduced risks and

returns

Emerging Industries

Emerging industries can be defined as

the establishment of an entirely new industrial
value chain. In other words, these are the
upcoming companies and businesses within new
or revitalized sectors that subsequently become
successful or highly sought- after.

Characteristics of an Emerging Industry

a) New and Unproven Market

b) Proprietary Technologies

c) Low Entry Barriers

d) Buyers are first time users