Session 343

What Drives Competition?

Track E

Date: Tuesday, September 23, 2014


Time: 17:15 – 18:30

Common Ground

Room: Luxemburgo


  • Javier Gimeno, INSEAD

Title: Competitive Dynamics: How Information Constraints Can Trigger Competitive Moves


  • Elena Golovko, Tilburg University
  • Wolfgang Sofka, Copenhagen Business School

Abstract: We relax two important assumptions of competitive dynamics models. We extend the model to competition between multiple competitors competing with a variety of products. In such a setting information constraints become crucial because companies can no longer be assumed to have perfect information about the competitive attacks that they are facing. We predict that firms will choose competitive moves more selectively if they face attacks that are more concentrated and sustained. Both factors make it easier for the focal firm to analyze attacks and act accordingly. We support these predictions for a comprehensive dataset of competitive pricing moves on the US car market between 2005 and 2007.

Title: Cooperation-based Competition: Resource and Market


  • Meng-Hsien Yen, National Chengchi University
  • Tzu-Ju Ann Peng, National Chengchi University

Abstract: A re-conceptualization of cooperation-based competition between rival partners is urgently needed. This study is conducted to answer while cooperating with competitors, how rival partners compete in the arena of resource and market? We analyzed the competitive interactions between two leading firms in Taiwanese bicycle industry. This study made a scrutiny into the reported issues of e-bike and women’s bike from 2006 to 2010. We concluded two implications. Firstly, based on cooperation, two rival partners are more likely to decrease resource similarity while they still have to compete in the same market. Secondly, given high market commonality, two rival partners based on cooperation are more likely to avoid head-on competition. This exploratory study has shed some light on the issue of cooperation-based competition.

Title: Evaluation and Deterrence: The Dual Role of Rival Firms’ Investment Decision under Uncertainty


  • Shaohua Lu, Tulane University

Abstract: Uncertainty is the key feature of strategic choice. The majority of prior literature refines uncertainty as asymmetric information and focuses on firms’ imitative behavior. Yet, uncertainty could refer to complete ignorance in all firms competing in the same product market, which implies a different mechanism of how rival’s choice would impact a firm’s incentive for investment. As we will argue, investment by rival firms would play a dual role in a firm’ decision-making process, i.e., an evaluation effect and a competition effect. Using a simple theoretical model, this study makes an attempt to examine the two faces of rival’s investment and explores their distinct implications for firms’ investment decision. The formal modeling efforts provide theoretical basis for empirically identifying and estimating the dual effects of rival’s investment choice under uncertainty.

Title: The Resource-Based View on Competitive Initiatives: The Moderating Role of Rivals' Attacks


  • Bou-Wen Lin, National Tsing Hua University
  • Chih-Yi Su, National Tsing Hua University

Abstract: This paper examines the effects of two resource-based factors, technological prestige and free cash flow(FCF), on competitive initiatives under rival's attacks. Building on competitive dynamics perspective and resource based view, this study propose that each of two resource-based factors has curvilinear effects on competitive initiatives, and these effects become strengthened by rival's attacks. The findings support that when rival's attack is low, each of two resource-based factors has a U-inverted influence on competitive initiatives. That is, greater resource impedes the competitive initiatives. When rival's attack is high, it reverses the directionality of the prestige-action relationship into J-shape relationship, and the FCF-action relationship into a U-shape relationship. Greater prestige is associated with more competitive actions, whereas, low and high levels of FCF enable firms to take more competitive actions.

Title: Understanding Market Entry through Resources and Competitive Conditions


  • John Upson, University of West Georgia
  • Mariana Sanchez, University of West Georgia
  • William Smith, University of West Georgia

Abstract: Market entry is largely viewed as a dichotomous event: Firms are aggressive by entering markets and they are docile by not entering markets. What has not been acknowledged is that the aggression by which firms enter markets differs with each entry. One factor that may influence firms’ aggression of market entry is the threat of retaliation from market incumbents. We suggest that when market incumbents are expected to retaliate, firms enter aggressively and when market incumbents are expected to accommodate, firms enter passively. We then assert that survival rates increase as firms more closely align their entry aggression with expected retaliations. We test these relationships in the context of multipoint competition and find support in the results of 90 product market entries by 84 firms.

All Sessions in Track E...

Sun: 08:00 – 09:15
Session 282: The Latest and Greatest in Empirical Methods for Strategy Scholars
Sun: 09:30 – 10:45
Session 1: Frontiers of Value Capture Research: Complementary Developments in the Theory and Empirics
Sun: 11:15 – 12:30
Session 284: The Strategic Process and Competitive Dynamics of Industry Convergence
Sun: 15:45 – 17:00
Session 341: Stakeholders, Board of Directors and Competitive Strategy
Sun: 17:15 – 18:30
Session 601: Competitive Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 366: Markets, Brands, Customers and Competition
Mon: 11:00 – 12:15
Session 342: Resource Based View
Mon: 14:45 – 16:00
Session 368: Firm Scope and Industry Competition
Mon: 16:30 – 17:45
Session 348: Differentiation and Competitive Strategy
Tue: 08:00 – 09:15
Session 349: Leaders, Laggards and Competition
Session 367: What Drives Firm Heterogeneity Across Time?
Tue: 11:00 – 12:15
Session 350: Governance, Organization and Competition
Tue: 15:30 – 16:45
Session 364: Conceptual developments in Competitive Strategy
Tue: 17:15 – 18:30
Session 343: What Drives Competition?

Strategic Management Society