From protection to adjustment: How rival repositioning alters competitive action repertoires

Competitive dynamics research has extensively examined the drivers of firms’ competitive action repertoires. However, less attention has been given to how a firm’s positioning in the competitive landscape affects its repertoire. We address this gap by investigating how competitive repertoire intensity, complexity, and nonconformity are influenced by rival positioning convergence which decreases the distinctiveness of firms’ market position. We propose a protection-adjustment framework and, using a comprehensive sample of public U.S. firms from 2001 to 2022, find an inverted U-shape relationship between rival positioning convergence and the intensity and complexity of firms’ competitive repertoires. At moderate levels of rival convergence, firms exhibit higher intensity and complexity in their repertoires as contested fronts expand, and they attempt to protect their positions. However, extreme levels of rival positioning convergnece are associated with lower intensity and complexity as firms attempt to de-escalate rivalry and avoid its heightened costs by adjusting their repertoires. Conversely, we find a U-shape relationship between rival positioning convergence and firms’ competitive nonconformity. As rivals move closer, firms tend to adopt more conventional actions as a protective response. Yet, when rivals converge substantially, firms adjust their repertoires with greater action nonconformity. We advance our understanding of how rival positioning convergence influences competitive behavior by triggering a protection–adjustment process.