Case Study:

Using the competitive dynamics model answer the following question by choosing a business or an organization with examples to support your answer.

Hence your answer should include points discussed for competitive actions of strategic or tactical. Refer to the following course materials.

Competition among incumbent rivals can involve hardball strategies: Devastating rivals profit sanctuaries Plagiarizing with pride Deceiving the competition Unleashing massive & overwhelming force Raising competitors costs. Once an organization determines whether it is willing and able to launch a competitive action, it must determine what type of action is appropriate. The actions taken will be determined by both its resource capabilities and its motivation for responding. Two broadly defined types of competitive action include strategic actions and tactical actions. Strategic actions = major commitments of distinctive and specific resources to strategic initiatives. Tactical actions= refinements or extensions of strategies usually involving minor resource commitments.

Awareness of the threats posed by industry rivals allows a firm to understand what type of competitive response, if any, may be necessary. Threat analysis = a firms awareness of its closest competitors and the kinds of competitive actions they might be planning. Competitive dynamics are likely to be most intense among companies that are competing for the same customers or who have highly similar sets of resources. Market commonality = the extent to which competitors are vying for the same customers in the same markets. Resource similarity = the extent to which rivals draw from the same types of strategic resources. When any two firms have both a high degree of market commonality and highly similar resource bases, a stronger competitive threat is present. Once attacked, competitors are faced with deciding how to respond: What is their motivation and capability to respond? Before deciding, they need to evaluate not only how they will respond, but also their reasons for responding and their capability to respond: How serious is the attack, and what might be the intent of the competitive response? Is it merely to blunt the attack of the competitor, or is it an opportunity to enhance its competitive position? Sometimes the most a company can hope for is to minimize the damage caused by a competitive action. Companies also have to consider what strategic resources can be deployed to fend off a competitive attack. Does the company have an array of internal strengths it can draw on, or is it operating from a position of weakness?

QUESTION THREE:

When an incumbent faces a new entry from a competitor to the market, this incumbent should decide whether on an offensive approach and initiate aggressive strategic moves to improve its market position, or to employ defensive strategies to protect its market position. As a result, a competitive dynamic-action and response begins in the market. Suggest and critically discuss a model that helps managers to decide to adopt an offensive or defensive route. Support your answer with examples. (45 marks)