8
Chapter 8
Global
chapter
Competitive
Dynamics
GlobalGlobal Strategy
Strategic Management
Mike W. Peng
Mike W. Peng
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Strategy as Action
Source: C. M. Grimm & K. G. Smith, 1997, Strategy as Action: Industry
Figure 8.1
Rivalry and Coordination (p. 62), Cincinnati: Thomson South-Western.
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duplicated, or posted to a publicly accessible website, in whole or in part.
Industry-based considerations Resource-based considerations
• Concentration • Valuable capabilities to attack,
deter and retaliate
• Industry leader
• Product homogeneity • Rarity of certain assets
• Stability of demand and supply • Imitability of competitive actions
• Entry barriers • Organizational skills for actions
• Market commonality with rivals • Resource similarity with rivals
Competitive
A Comprehensive dynamics
Model of Global Attack/Counterattack
Cooperation
Competitive Dynamics
Institution-based considerations
• Domestic competition: Primarily
competition/antitrust policy
• International competition: Primarily
trade/antidumping policy
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website, in whole or in part.
A Prisoners’ Dilemma for Airlines and Payoff Structure
(assuming a total of 200 passengers)
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Figure 8.3
posted to a publicly accessible website, in whole or in part.
Industry Characteristics and Possibility
of Collusion vis-à-vis Competition
COLLUSION POSSIBLE COLLUSION DIFFICULT (COMPETITION LIKELY)
Few firms (high concentration) Many firms (low concentration)
Existence of an industry price leader No industry price leader
Homogeneous products Heterogeneous products
High entry barriers Low entry barriers
High market commonality (mutual forbearance) Lack of market commonality (no mutual
forbearance)
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be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part. Table 8.1
A Framework for Competitor Analysis
Between a Pair of Rivals
Sources: Adapted from (1) M. Chen, 1996, Competitor analysis and interfirm rivalry: Toward a theoretical integration (p. 108), Academy of
Management Review, 21: 100–134 and (2) J. Gimeno & C. Y. Woo, 1996, Hypercompetition in a multimarket environment: The role of
strategic similarity and multimarket contact in competitive de-escalation (p. 338), Organization Science, 7: 322–341.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, Figure 8.4
or posted to a publicly accessible website, in whole or in part.
Three Main Types of Attack
Thrust Feint
Attacks
Gambit
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be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Thrust
Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain
spheres of influence: Resource diversion strategies (p. 729), Academy of Management Review, 23: 724–740.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or Figure 8.7
posted to a publicly accessible website, in whole or in part.
Feint
Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain
spheres of influence: Resource diversion strategies (p. 731), Academy of Management Review, 23: 724–740.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or Figure 8.8
posted to a publicly accessible website, in whole or in part.
Gambit
Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain
spheres of influence: Resource diversion strategies (p. 733), from Academy of Management Review, 23: 724–740.
Copyright © 1998. Reprinted by permission of Academy of Management Review via Copyright Clearance Center.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted Figure 8.9
to a publicly accessible website, in whole or in part.
How Local Firms in
Emerging Economies
Respond to
MNE Actions
Source: Adapted from N. Dawar & T. Frost, 1999, Competing with giants: Survival strategies for
local companies in emerging markets (p. 122), Harvard Business Review, March-April: 119–129.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or Figure 8.10
posted to a publicly accessible website, in whole or in part.