Competitive Pressure: Competitive Dynamics as Reactions to Multiple Rivals
AbstractCompetitive dynamics research has focused primarily on interactions between dyads of firms. Drawing on the awareness-motivation-capability framework and strategic group theory we extend this by proposing that firms’ actions are influenced by perceived competitive pressure resulting from actions by several rivals. We predict that firms’ action magnitude is influenced by the total number of rival actions accumulating in the market, and that this effect is moderated by strategic group membership. We test this using data on the German mobile telephony market and find them supported: the magnitude of firm’s actions is influenced by a buildup of actions by multiple rivals, and firms react more strongly to strategically similar rivals.
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Bibliographic InfoPaper provided by University of Munich, Munich School of Management in its series Discussion Papers in Business Administration with number 12308.
Date of creation: Aug 2011
Date of revision:
Competitive rivalry; competitive dynamics; strategic groups; mobile telecommunications;
Other versions of this item:
- Leon Zucchini & Tobias Kretschmer, 2012. "Competitive Pressure: Competitive Dynamics as Reactions to Multiple Rivals," DRUID Working Papers 12-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-05 (All new papers)
- NEP-BEC-2011-09-05 (Business Economics)
- NEP-COM-2011-09-05 (Industrial Competition)
- NEP-CSE-2011-09-05 (Economics of Strategic Management)
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