Jennica P.

Bucal

BSBA III- FM

STRATEGIC MANAGEMENT

CHAPTER 5

*KEY TERMS

Competitors- are firms operating in the same market, offering similar products, and
targeting similar customers.

Competitive rivalry- is the ongoing set of competitive actions and competitive responses
that occur among firms as they maneuver for an advantageous market position.

Competitive behavior- is the set of competitive actions and responses a firm takes to build
or defend its competitive advantages and to improve its market position.

Competitive dynamics- refer to all competitive behaviors that is, the total set of actions
and responses taken by all firms competing within a market.

Competitive actions- is a strategic or tactical action the firms takes to build or defend its
competitive advantages or improve its market position.

Competitive response- is a strategic or tactical action the firm takes to counter the effects
of a competitor’s competitive action.

First mover- is a firm that takes an initial competitive action in order to build or defend
its competitive advantages or to improve its market position.

Fast cycle markets- are markets in which the firm’s capabilities that contribute to
competitive advantages aren’t shielded from imitation and where imitation is often rapid
and inexpensive.

Late mover- is a firm that responds to a competitive action a significant amount of time
after the first mover’s action and the second mover’s response.
Multimarket competition- occurs when firms compete against each other in several product
or geographic markets.

Market commonality- is concerned with the number of markets with which the firm and a
competitor are jointly involved and the degree of importance of the individual markets to
each.

Quality- exist when the firm’s goods or services meet or exceed customers’ expectations.

Resource similarity- is the extent to which the firm’s tangible and intangible resources are
comparable to a competitor’s in terms of both type and amount.

Strategic action/Strategic response- is a market-based move that involves a significant

commitment of organizational resources and is difficult to implement and reverse.

Second mover- is a firm that responds to the first mover’s competitive action, typically
through imitation.

Slow-cycle markets- are markets in which the firm’s competitive advantages are shielded
from imitation, commonly for long periods of time, and where imitation is costly.

Standard-cycle markets- are markets in which the firm’s competitive advantages are
partially shielded from imitation is moderately costly.

Tactical action/Tactical response- is a market-based move that is taken to fine-tune a

strategy; it involves fewer resources and is relatively easy to implement and reverse.

*REVIEW QUESTIONS

1. Competitors are the one that firms operating in the same market, offering similar
products, and targeting similar customers. Competitive behavior is essentially the set of
actions and responses a firm takes as it competes against its rivals. Competitive rivalry to
gain an advantages market position. Competitive dynamics, refer to all competitive
behaviors that is the total set of actions and responses taken by all firms competing within
a market.

2. Market commonality is concerned with the number of markets with which the firm and
a competitor are jointly involved and the degree of importance of the individual markets to
each. Resource similarity is the extent to which the firm’s tangible and intangible resources
are comparable to a competitor’s in terms of both type and amount. When performing a
competitor analysis, a firm analyzes each of its competitors with respect to market
commonality and resource similarity. The results of these analyses can be mapped for visual
comparisons.

3. The drivers influence the firm’s actual competitive behavior, as revealed by the actions
and responses it takes while engaged in competitive rivalry.

4. Three factors are first mover benefits, organizational size, and quality.

5. A competitive response is a strategic or tactical action the firm takes to counter the
effects of a competitor’s competitive action.

6. Taking them, are similar within each market type, but differ across types of markets.

*CASE DISCUSSION QUESTIONS

1. The firms concentrate on different segments in attempting to create superior

stakeholder value and to avoid direct, head to head competition in a host of product
segments and markets. FedEx intends to leverage and extend the FedEx brand and to
provide customers with seamless access to its entire portfolio of integrated transportation
services while UPS seeks to position itself as the primary coordinator of the flow of goods,
information, and funds throughout the entire supply chain. They also seek to differentiate
themselves in ways that enhance the possibility of being able to gain strategic
competitiveness and earn above-average returns. FedEx concentrates more on
transportation services and international markets. While, UPS concentrates more on the
entire value chain while competing domestically. UPS is the world’s largest international air
shipping firm, while UPS is the world’s largest package delivery company.

2. FedEx learned that its contract to fly domestic mail for the U.S portal service had been
selected for renewal. UPS also bid on the contract, and thus it lost competitive battle to its
rival. To enhance its ability to compete against UPS and other rivals as well, FedEx is
restructuring some of its operations to increase efficiency. The firm increasing its emphasis
on finding ways for its independent express, ground, and freight networks to work
together more synergistically.
3. For me, the UPS will be have a successful in the future because of their firms that given
and strong company. Giving it access to the increasingly important markets.