A Job at East Coast Yatchs Essays a 401

Topics: Competition, Competitor analysis, Ecological model of competition Pages: 28 (9199 words) Published: April 14, 2013
MANAGERIAL AND DECISION ECONOMICS Manage. Decis. Econ. 23: 157–169 (2002) DOI: 10.1002 /mde.1059

Competitor Identification and Competitor Analysis: A Broad-Based Managerial Approach Mark Bergena,y and Margaret A. Peteraf b,*

Carlson School of Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455, USA b Tuck School of Business at Dartmouth College, 100 Tuck Hall, Hanover, NH 03755, USA Managerial myopia in identifying competitive threats is a well-recognized phenomenon (Levitt, 1960; Zajac and Bazerman, 1991). Identifying such threats is particularly problematic, since they may arise from substitutability on the supply side as well as on the demand side. Managers who focus only on the product market arena in scanning their competitive environment may fail to notice threats that are developing due to the resources and latent capabilities of indirect or potential competitors. This paper brings together insights from the fields of strategic management and marketing to develop a simple but powerful set of tools for helping managers overcome this common problem. We present a two-stage framework for competitor identification and analysis that brings into consideration a broad range of competitors, including potential competitors, substitutors, and indirect competitors. Specifically we draw from Peteraf and Bergen’s (2001) framework for competitor identification to develop a hierarchy of competitor awareness. That is used, in combination with resource equivalence, to generate hypotheses on competitive analysis. This framework not only extends the ken of managers, but also facilitates an assessment of the strategic opportunities and threats that various competitors represent and allows managers to assess their significance in relative terms. Copyright # 2002 John Wiley & Sons, Ltd.

INTRODUCTION Competitor identification is a key task for managers interested in scanning their competitive terrain, shoring up their defenses against likely competitive incursions, and planning competitive attack and response strategies. It is a necessary precursor to the task of competitor analysis, and the starting point for analyzing the dynamics of competitive strategy (Smith et al., 1992). Before one can assess the relative strengths and weaknesses of rivals, or track competitive moves and countermoves, one must first identify the competitive set and develop an accurate sense of the

*Correspondence to: Tuck School of Business at Dartmouth college, 100 Tuck Hall, Hanover, NH 03755, USA. E-mail: peteraf@dartmouth.edu y mbergen@csom.umn.edu

domain in which strategic interactions are likely to occur. The purpose of this paper is to provide a set of tractable frameworks for competitor identification and competitor analysis that facilitate broad environmental scanning. To inform our frameworks, we borrow from Peteraf and Bergen’s (2001) framework for competitor analysis. Their work borrows from Chen’s (1996) model of competitor analysis, adapting his constructs to our purposes by drawing on the marketing literature on consumer behavior (Levitt, 1960; Nedungadi, 1990; Peter and Olson, 1993, Mowen and Minor, 1995). Specifically, we bring into sharp focus the role of customer needs in defining the marketplace to show how a greater recognition of customer needs can expand awareness of what lurks on the competitive horizon. This allows us to address a supply side bias that is often present in

Copyright # 2002 John Wiley & Sons, Ltd.



other approaches to competitor identification (Clark and Montgomery, 1999). Moreover, we use this to develop a hierarchy of competitor awareness that is central to our hypotheses on competitor analysis. Further, we introduce the concept of resource equivalence to facilitate the comparison of the abilities of indirect and potential competitors to meet the same set of customer needs as direct competitors. This allows us to offer a differentiated approach to competitor...
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