Discussion Question: If you look at competitive dynamics, competitors are more likely to respond when attacked in a market where the competitor relies on that market for a large portion of its sales. Look at current events to tell me why is this so? Give examples. What ‘dynamic' is at work that would cause that type of response? Again, be specific and give examples - do not regurgitate the textbook - tell me in your own words.
Peer Initial post:Competitive dynamics is "the intense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace" (Dess, Lumpkin, Eisner & McNamara, 2014.p. 263). A current event that has changed the market is smartphones and is a great example of competitive dynamics. There is a high degree of market commonality with the smartphone with similar products and buyers. In the global market, smartphones companies differ in each country, but in the U.S., some of the most popular brands are Samsung, Apple, HTC, and Nokia. The carriers of the smartphones like Verizon, AT & T, T-Mobile and Sprint are using strategic and tactical competitive actions to take business away from each other. There is also a high degree of resource similarity, since they draw from the same type of resources.
The information and communication technology (ICT) industry has the potential to alter competitive dynamics in most industries (Kenney, Rouvinen, & Zysman, 2015). The smartphone was only the starting point and now other industries are using the technology to change products. Cloud base service is the "Mother Platform" since it allows user access into multiple different sites and is affecting every aspect of economic activity (Kenny, Rouvinen & Zysman, 2015). ICT has changed the competition from not allowing higher premium prices for a product, due to lower cost providers having a similar product. Competing about the price of a product is part of competitive dynamics. The smartphone is a good example of disruptive technologies due to changes in innovations that benefits or transform the cost of production (Besanko, Dranove, Shanley & Schaefer, 2013, p. 251).
A study was done in Malaysia with 182 Generation Y (18-35 age group) respondents to an online survey to determine if brand trust, customer usage satisfaction, and self-image congruence with the brand, impacted repeat purchase intention on the smartphone (Goh, Jiang & Tee, 2016). The correlation analysis showed that all three areas, self-image congruence, usage satisfaction, and brand trust all positively affected repeat purchases of the smartphone. The regression analysis showed with a Beta equal to 0.422, P<0.01 that self-image congruencies had the highest impact of repeat purchase of the smartphone. Self-image congruency in this study is referring to the consumer buying products and brands to complement their self-image, or are similar to their perceived self-image (Goh, Jiang & Tee, 2016). This example, shows the importance of obtaining first-mover advantages, and to change the product to meet the needs of the customers to retain brand loyalty.
Some of the dynamic's that would cause that type of response are the customer's response to the brand name of the product or company. The smartphone industry is in a constant threat from the closest competitors and must react to these threats to stay competitive. Some consumers will change carriers and brands of phone, to get the newest product at the lowest cost. The price sensitivity of the buyers can result in a boost in sales and is why some companies under cut the competitor's prices (Besanko, et al. 2013, p. 243). Being aware of competitor actions, will provoke a response in the smartphone industry.
Need peer response to peer initial post (Expound on peer initial post): Word Count 150