NAVIGATING THE COMPETITIVE LANDSCAPE: THE DRIVERS AND

CONSEQUENCES OF COMPETITIVE AGGRESSIVENESS

Firms often directly and aggressively challenge competitors in effort to improve relative
performance. The aims of this article are to understand better the process of competitive
interaction occurs in strategic time, to capture how competitive aggressiveness influences firm
performance and how aggressiveness is influenced by several important internal and external
forces and constraints.
The author discusses about aggressive competitive interaction and presents the focal four distinct
levels of firm strategy which researchers in the competitive dynamics stream within strategic
management research have been developed: individual action-reaction dyads, an action year, a
repertoire-year and the type and timing of competitive actions. From these theories, it is
concluded that aggressive competitive behaviors is related to better organizational performance.
In this article, there are some definitions that should be concerned:
Competitive attack: an ordered, uninterrupted sequence of repeatable competitive action
events. It is shaped by the interplay of multiple competitive actions carried out by the
attacking firm and perhaps punctuated by one or more competitive responses made by
rivals.
Competitive action events: the externally directed, specific, and observable competitive
moves initiated by a firm to enhance its competitive position. The authors categorized the
action events as follow: pricing actions, marketing actions, new product actions, capacity
actions, service actions and signaling actions.
There are also four important characteristics of a firms competitive attack: volume, duration,
complexity and unpredictability.
FfFfFFFfsF author also develops and tests a dynamic process model of competitive interaction
among firms. The aim of this model is to find out how important organizational and industry
characteristics give rise to both enabling and constraining forces that influence competitive
aggressiveness and how this process influences relative firm performance.
The results of the study show that relative performance is linked to sustaining a high level of
competitive aggressiveness. By exploring the determinants and consequences of the process of
competitive interaction, researchers and practitioners may be able to obtain a better f of the key
internal and external factors that facilitate or constrain competitive aggressiveness.
There are some findings related to the influences competitive attack:
Competitive aggressiveness and adaptation are influenced by a top management teams
ability to scan and interpret signals from the competitive environment.
Heterogeneous top teams are better equipped to carry out a complex sequence of
competitive moves than homogeneous top teams because of their diverse cognitive and
experiential backgrounds.
Good past performance breeds complacent behavior, thereby reducing a firms motivation
to sustain competitive attacks for a significant duration.
High level of slack provides the resources required for competitive aggressiveness.

The study also indicates some outcomes of competitive attack:

Attack volume and attack duration contributed to market share gains.
When firms carry out more total actions than rivals do over the course of an entire year,
they get higher profits and market share gains.
Relationships between both attack complexity and unpredictability and performance are
perhaps more complex that previously imagined.
Both attack complexity and attack unpredictability would be related to market share gains
at an increasing rate.
Attack complexity and attack unpredictability influence the rate at which rivals are about
to learn how to untangle and respond to an initiating firms competitive attack.
FfRivals can respond more quickly to simple attacks but a complex or unpredictable
ffattack reduces implementation speed, thus suppressing its ability to improve
performance, thereby enhancing the attackers performance.

Name: Duong Nguyen

Student number: 282543

COMPETITIVE DYNAMICS, STRATEGIC

ORGANIZATIONAL SURVIVAL

CONSISTENCY,

AND

Strategic consistency is defined in this article as a firms actions conjoin both with changes in the
business environments and the firms own history. Consistency is considered as a necessary
condition for firm survival. Besides, the question about what extent firms should be consistent in
their strategy and structure is the main question in strategic management. Thus, the main purpose
of this article is to have a deeper look about the strategic consistency in competitive behavior.
The authors draw a model of the process that lead to different levels of strategic consistency and
to organizational survival or death. The framework includes key elements, such as competitive
actions, the level of strategic consistency, market process and feedback, organizational structure
and strategy, and organizational resources. It also assumes the relationship with the surrounding
environment and competitors.
The authors also concern about strategic consistency of the retail industry. They made a research
of four dominant grocery retail organizations in Finland (Kesko, SOK, TUKO, and EKA), during
the period of 1945-1995. Three main research questions are drawn:
1. How and why is the organizational structure and strategy of the studied retail
organizations related to different levels of strategic consistency?
2. How and why are the organizational resources of the studied retail organizations related
to different levels of strategic consistency?
3. To what extent does to level of strategic consistency explain organizational survival and
death?
The authors also make a quantitative analysis of the levels of strategic consistency to scrutinize
these three questions. The result shows that the success firms have higher strategic consistency in
their competitive behavior than the less successful firms and the differences in the competitive
behavior of these firms are considerable.
Concerning Proposition 1, the study shows that there is a considerable difference in term of their
administration between these organizations. TUKO administration was kept light, but Kesko and
SOK kept their administrations unified and large.
Concerning Proposition 2, the study shows that internal political struggle in the organization are
the main reason which lead to a decrease in strategic consistency.
Concerning Proposition 3, the research shows that the role of organizational slack resources is of
crucial importance, it can lead to the survival/death on the organization.
In conclusion, an appropriate level of strategic consistency is a necessary condition for firm
survival.

Name: Duong Nguyen

Student number: 282543

COMPETITIVE DYNAMICS RESEARCH: CRITIQUE AND FUTURE

DIRECTIONS
The authors aim to review competitive dynamics literature and choose to analyze over 30 articles
in management journals which focused on competitive dynamics and on explaining or predicting
competitive action.
Competitive dynamics are created by a series of actions (moves) and reactions (countermoves)
among firms in an industry. The main study of competitive dynamics is suggested to be the study
of how a firm action (moves) affects competitors, competitive advantage, and performance.
Throughout this article, the authors focus on researching the empirical study of actions and
reactions of firms within the strategic management literature.
The authors also provide a figure (figure 1) which is an overview of the components and
relationships in competitive dynamics. It includes the actor (the firm which have a competitive
action), the competitive action, the responder (the firms that reacts), and the response to the
action, the industry context of competitive activity and the performance outcomes of competitive
interaction.
When analyzing the competitive dynamics articles, the authors mention that the researchers of
these articles employed two basic methodologies: field studies and archival studies. Field studies
(or primary data) require the researchers to go out in the field and make observations on firm
action and reaction. Archival studies (or secondary data) are based on a formal coding analysis,
such as newspapers, magazines, and other published material.
The research indicates that the competitive dynamics stream of research provided a number of
important contributions to business-level strategic management and mainly focused on strategy
as behavior, competitive interdependence, and explanations of the important antecedents and
consequences of competitive action. The research model in this article is also considered as a
support to a wide variety of industries in which competitors carried out thousands of competitive
actions and responses. The authors believe that the current research in competitive dynamics has
reached an important inflection point. Their study is a strong foundation for future research and
recommends that the theoretical roots of their models and propositions need to be broadened.
The authors mentions that almost the research article in competitive dynamics were done in
terms of research methods and samples, thus more theoretical development is necessary if the
value of competitive dynamics perspective is to be fully realized. Their review shows that the
strongest and most consistent empirical relationship includes the negative relationship between
action/reaction timing and firm performance and the positive relationship between
action/reaction aggressiveness and performance. Besides, the competitive reaction can be
predicted based on characteristics of the action.
Their study reveals that competitive dynamics researchers have closely aligned themselves to the
all-knowing assumption consistent with early decision theory. It suggests that researchers should
f gnggg wa broader and richer explanation of the actions and reactions than exists in the current
research. F, the authors also offer a set of propositions to guide the future research.