THE DYNAMICS OF

COMPETITIVE
RIVALRY
 OBJECTIVES:

 UNDERSTAND THE IMPORTANCE OF COMPETITIVE DYNAMICS

 KNOW THE IMPORTANCE OF THE GLOBAL MARKET AND ITS
COMPETITIVE ADVANTAGE
 DEVELOP TACTICAL ACTIONS TO COMPETITIVE RIVALRY
 ENUMERATE THE FACTORS THAT INFLUENCE Likelihood OF
RIVALRY ATTACK
 GIVE THE IMPORTANCE OF PRODUCT QUALITY AS STRATEGY
FOR COMPETITIVENESS
 ENUMERATE THE DIFFERENT DYNAMICS RIVAL’S RESPONSE
ACTION
Competitors- firms operating in the same market, offering similar
products and targeting similar customer.

Competitive Rivalry- ongoing set of competitive actions and competitive

responses occurring between competitors as they contend with each
other for an advantageous market place.

The firms takes competitive actions to defend or build its

competitive advantaged or to improve its marked position,
competitive response are taken to counter the effects of a
competitors, competitive action are their strategic or tactical in
nature.
Competitive Behavior- the set of competitive action and
responses that an individual firm takes while engaged in
competitive rivalry.
Competitive Dynamics - is the firms total set of action and
response to all competitors within market Niche.
THE COMPETITVE DYNAMICS THERE ARE THREE MARKET CYCLES
1. Slow-cycle markets – market in which the firms competitive
advantages are shielded from imitation for long periods of time and in
which imitation is costly.

2. Fast-Cycle market- market in which the firms capabilities that

contribute to competitive advantages are not shielded from imitation
and where imitations that often rapid out and inexpensive.
Competitive advantages are not sustainable in fast cycle markets
Focus learning how to rapidly and continuously develop new
competitive advantages that are superior to those replace(creating
innovation)

3. Standard-cycle markets – markets where firm competitive

advantages are moderately shielded from imitation where imitation is
moderately costly.

Multiple Market Competitors – is the scenario where firms are

competing in several products and geographic.
Example of this competitions between, smart and globe
that provides different products and services to cellular
phone user in and outside the country, they provide a lot
of incentives and promotions to get the greater share of
the market and get better return on their investment,
which are already in place through their transmission
facilities.
THE DYNAMICS OF GLOBAL COMPETITION
Globalization- is the target of the most firms as the market expansions is
the direction of populated countries if the world.

Global dynamics of competition – is felt in the field of communication and

electronics, the firms are competing in price and product differentiation
cellular phones, computers, and other office equipment.

According to an article by times of India , in the year 2019,

The top 5 smart phones are : Samsung, Huawei, Apple, Oppo and Vivo
That wage war among each other in the market in terms of features and
price
Other unknown brands are competing in price for lower income groups in
the market niche.
The car industry – is another sector where global dynamics of
competitions exist with such known brand as, Honda, Toyota,
Mitsubishi, and Ford, and now Hyundai with its improved features and
price. They develop innovative features.
The Global competitive scope in Geographic’s Competitions- is
increasing in the intensity as the super powers in the world economy
is pressing pressure on the third world country. Developing to reduce
barriers for the entranced of their products.
The Dynamics of competition will be on the developed economics of
the world as they have the necessary technology and infrastructure to
the disadvantage of the new developing economy.
The Model of Competitive Strategy - Firms must develop strategies and
actions that should put outperform other firms on the industry
- Competitive response is interdependent, and firms watch each other's
actions and respond immediately to the market needs.
- The success of the market is a function of individual strategies and
actions and the consequences of their effective use.
THE INTENSITY OF MARKET RIVALRY IS AFFECTED
BY THE FOLLOWING:
1. Total number of competitors
- It is an analysis of the competitors who are offering the same
product, same market and the same marketing environment.

2. The Market Characteristics

- The market characteristics is concerned with the number of
market with which the firm and its competitors are jointly
involved and the degree of its importance of both firms.

3. The quality and extent of individual firm's strategies

- Strategies of firms must be able to identify the tangible and
intangible resources and that of the competitors. Firms with
similar resources and capabilities are more likely to have the
same strength and weaknesses and therefore use similar
strategies.
 STRATEGIC RESPONSE TO COMPETITOR’S ACTION
- As pointed out in many discussion, competitors would not rest until they will be
able to catch up or overtake leaders in the industry. No industry rests on their
laurels or successes, competitors overshadow their supremacy.
Factors they influence Strategic Response
1. Corporate awareness to competition.
The Strategic Response of awareness in prerequisite to any competitive action or
response. The lack of corporate awareness can lead to excessive competition
that will result in negative effect on all competitors' performance.
2. Motivation to response to competition

It refers to the corporate incentive to act or respond to the competitors' attack to

perceive gains or loses. Market commonality affects the corporate perceptions
and its resulting motivation. Firms will more likely attack its competitors with low
market commonality than the firms that offers multiple markets.
3. Ability in term of resources and technology.

While the firm may be aware of the competitor's attack and be

motivated to respond rival's action, they must also consider the
availability of their resources and technology at hand to enter the
market competition.

4. Dissimilarity of resources and operational capability

It refers to the competitive action and response between firms in that

the greater the resources imbalance between the actors of
competition or respondent competitors, the greater is the delay in
response .
-Operational capability in terms of logistic mobilization and delivery
is another factor that affects competitive advantage, which could not
be seen by the rival firms. System and procedure applied in the
operation are not easily available to rival firms and their
competencies and capabilities are entirely not the same.
TACTICAL ACTIONS TO COMPETITIVE RIVALRY
Competitive response is the strategic action that the
firm's take to counter the possible effect of it's market
position. The Strategic action must be easy to implement
and reverse the rivalry's counter action. A tactical
response is a market-based strategy that the firm makes
fine-tuning of its approaches to the competitors 'action.
FACTORS THAT INFLUENCE THE LIKELIHOOD OF RIVALS ATTACK
The attack in the market is present in all firms and competitors will always find ways to penetrate the
market their Products and services.

The likelihood off attack can be grouped into the following strategies.

1. Pioneering Incentive Strategy

The pioneering incentives strategy could be classified into two: A) Pioneer of

First mover strategy B.) Imitator or second mover strategy
The first movers have the following advantage:
• Consumers loyalty To the product developed
• Satisfied customer became committed to the product

The Imitators or second movers are:

• Avoid the problems and mistakes of the pioneers or first mover.
• Develop technologies and efficiency that are superior
• create products that customer value.
2. Organizational Size Strategies - big companies used to set on
their laurels confidents that the competitors could not easily
overtake their size. Smaller organizations that are aggressive
enough to increase their market niche are more likely to launch
competitive actions.
-Smaller firms' flexibility and nimbleness allow them to develop
greater variety in their competitive actions compared to large
organizations, which tent to limit the type of competitive
actions.
The competitive strategies of smaller firm against it's big rivals
are:
a. Lower investment cost in research and development;
b. Lower fixed and overhead expenses;
c.Technology and resource base through imitation;
d. Quicker and flexibility in action and response;
e. Lower product price with new features
3. Product Quality Strategies

- Quality is the byword in competitive strategy. It is a production of goods or

services with no defects involving a never ending cycle of continuous
improvement. -In corporate perspective quality is an outcome of how the firm
complete the cycle of the primary and support activities that develops
customer satisfaction that gives the firm the desired return on investments. -
In the eyes of the customer quality means doing the right things relative to
performance measure that are important to them.
Customer's Perception of Quality Products
a. Performance

b. Product Features
c. Flexibility
d. Conformance
e. Durability
f. Aesthetics
g. Serviceability