your adversaries will choose the option that they consider to be most effective. if you can answer “no” to any of the following questions, the chances of a response are low: most companies consider fewer than four responses to a competitor’s move. certain parts of the framework—such as estimating the likelihood of a company’s failure to notice an adversary’s move—could not be tested in such a survey and so are reported here on the basis of our experiences alone. through that work, and through a survey of senior executives we conducted in 2008, we have developed a practical approach to predicting competitive behavior that stays close to the theoretical rigor and accuracy of game theory but is as easy to apply as most of the alternative methods. the first step in analyzing a competitor’s reaction is to address the likelihood of no reaction. if the answer to any of them is no, the chances of a response are low.
add in the probable effects of your action, and you can make an initial prediction about whether the company will stay on track. this is remarkable, because respondents were describing only situations they recalled most vividly, in which their company noticed a threat and classified the action as a “major” move with “the potential to significantly affect your view of your competitive position in your market segment.” thus, the likelihood of no response in the average real-world situation could be much higher. when we looked at the number of options examined by companies searching for responses to a rival’s new-product launch or price change, we found that the overwhelming majority consider fewer than four. from the previous step, you will have developed a short list of options your adversary is likely to consider. the next two most-common answers were assuming a single round of counter-reaction either by the initial mover (the company making the innovation or price change to which the competitor is responding) or by multiple competitors. if these indicate that the decision is a close call, then you must also assess your adversary’s recent actions in response to a competitive move. and the competitor you can predict is the one you can learn to outsmart.
consider schick’s attempt to grow in the razor-system market with its introduction of the quattro. the poor response by kmart and other retailers to walmart’s growth in the late 1970s illustrates this point. the first response was cutting prices in the united states to protect its market share. this combination of moves forced rjr to protect its market share in the united states and neglect eastern europe.
such a scenario is especially scary if the quality of the competitor’s offerings is reasonably comparable to the firm’s. a is a lower-end brand that a firm introduces to try to protect the firm’s market share without damaging the firm’s existing brands. in response to the growing success of discount airlines such as southwest, airtran, jet blue, and frontier, both united airlines and delta airlines created fighting brands. three factors help to explain the likelihood that a firm will respond aggressively to rivals’ competitive actions. a lower-end brand that a firm introduces to try protect the firm’s market share without damaging the firm’s existing brands.
to understand how competitors will respond to your next move, evaluate the situation in their terms—not yours. research indicates that three factors determine the likelihood that a firm will respond to a competitive move: awareness, motivation, and capability. these research indicates that three factors determine the likelihood that a firm will respond to a competitive move: awareness, motivation, and capability. these, competitive response examples, competitive response examples, competitor response model, how to respond to competition in business, competitive response framework.
in a competitive response case, your job is either to analyze what your client should do in response to a major competitor’s strategy or to anticipate what in the ever-changing business-to-business space, successful companies are those that know how to adapt when competitors disrupt the market. a competitive response is a move that is taken to counter the effects of a competitor’s action. thus, companies considering making a competitive move should, competitive response strategy example, how will you respond to a new competitor, reaction strategy example, examples of companies competing on response, competitive action examples, competitor reaction pattern, competitors, competition reaction example, multipoint competition examples, competitors are more likely to respond to competitive actions that are taken by. what is a competitive response? how do you respond to competitors? what is competitive action and response? what is a competitor response profile?
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