Functional Microeconomic Models Of Competition Essay

1411 WordsSep 26, 20166 Pages
The purpose of the author is to develop a theoretical framework, evolved from basic microeconomic models of competition, to highlight six streams relevant to competitive dynamics in the chronological order of the level of research- competitive action and response, first-mover advantage, co-opetition, multipoint competition, strategic groups and regional clusters. The author then discuss the challenges related with each research streams and areas of overlap and disagreement within them and outline associated research opportunities both within and across the streams. THEORETICAL BACKGROUND The main goal of strategic management research is to underline how competitive moves help firms develop long-term advantage and improve performance (Hitt, Boyd & Li, 2004). But each move does not take place in isolation. Each move must be coordinated with other moves and must evaluate the response it will generate from competitors. The authors then indicated how competitive interactions could be both destructive and threatens survival, as well as constructive and enhance firm success. The authors then defined each research streams. Competition action and response means how a firm’s action will affect their customers and can generate rival’s reaction too. First-mover advantage considers the role of timing and order of actions and responses. Co-opetition is the process wherein two or more firms compete and cooperate with each other simultaneously. Multipoint competition refers to a situation
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