Competitive Dynamics: Themes, Trends, and a Prospective Research Platform

Abstract

We provide a critical retrospective of the competitive dynamics perspective before proposing an integrative research platform for the future. We argue that competitive dynamics can serve as a synthesizing framework for linking strategy content and process, resource-based and market perspectives, strategy development and implementation, and macro-competitive and micro-actor viewpoints. We first present the core distinguishing elements and purposes of competitive dynamics. Then, we identify and relate the most prominent research themes in the field: a focus on action/response dyads, strategic competitive behaviors, competitive repertoires, corporate-level competitive and resource analyses, and competitive perceptions. Characteristic methodological concerns are also discussed. Recent trends in each of these areas are highlighted; these include an increased emphasis on context-specific research, cross-border investigations, and behavioral interdependencies. We conclude by identifying gaps in the literature and proposing a general model and research agenda that integrates micro-behavioral and macro-organizational aspects of strategy and connects competitive dynamics to previously unexplored domains in the literature. There is some repetition in the presentation so that most sections can be read independently.

Acknolwedgements

This paper is dedicated to Ian C. MacMillan, whose mentorship and guidance have been instrumental not only to Ming-Jer's work in competitive dynamics but to his academic career in management as well. The authors thank Royston Greenwood, Ken Craddock, George Huber, Dev Jennings, Gavin Kilduff, Hao-Chieh Lin, Isabelle Le Breton-Miller, John Michel, David Sirmon, Wenpin Tsai, Charles Tucker, and Jing Zhou for their valuable comments on an earlier draft of this paper. Financial support from the Darden Foundation, University of Virginia, and from the Social Sciences and Humanities Research Council of Canada is acknowledged.

Notes

In early years, terms such as “competitive interaction”, “competitive engagement”, or “interfirm rivalry” had been used interchangeably (Chen, 2010). To economists, dynamics involved temporal consideration rather than the interactive nature of competition that competitive dynamics researchers intended to explore.

Competitive actions vary in terms of organizational and resource commitment. Strategic actions (e.g. manufacturing capacity changes and major product introductions), in contrast to tactical actions (e.g. price changes, promotions, distribution and service improvements), require a greater degree of organizational and resource commitment (Smith et al., 1991).

The AMC factors can be either barriers or facilitators to action and response (Haleblian et al., 2012).

The categorization of a same variable may differ among papers because of differences in their theoretical focus and orientation. Unless a paper states that a variable includes more than one AMC component, each variable is categorized by one component only.

This section draws considerably from Chen (2011).