The Strength of Competitive Analysis

905 Words Nov 23rd, 2007 4 Pages

Competition Theories Compete

It is never doubted by academic circles and business environments that the strength of competitive analysis, if not the top, is one of the most important critical success factors in creating and managing marketing strategies. The way a business adapts to competitive environments, characteristic of its focus being self-centered, competitor-centered, customer-driven or market driven (Day and Nebugandi, 1994), will define its place in the complex marketing arena.

However, different theories of competition seem to compete in offering better explanations for key macro and micro phenomena. In this paper, we attempt to review the different perspectives on The Comparative
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Thus, firms observe competitive advantages and disadvantages, where the parity state belonging to static command markets are never observed.

As seen in Figure 1, CATC suggests that, firms have to manage and optimize resources, tangible and intangible, in order to gain comparative advantage over their competitors. Comparative advantage provides the firms to gain market positions that

possess competitive advantage which will aid the firms in reaching their absolute goal: superior financial performance. The arrows depict a continuous marketing management process that fit with the dynamic nature of CATC competition.

CATC & Neoclassical Theory of Perfect Competition (NTPC)

One might summarize that CATC differentiates itself from the classical view by the following four qualifiers: innovative, bountiful, high quality and rich diversity. Table 1 illustrates the differences between the two theories according to ten major variables. The only similarities between CATC and NTPC are that they both accept the firms as input combiners and humans as motivated by self-interest. (Deligönül and Çavuþgil, 1997)

As the neoclassical theory translates as perfect competition with homogeneous firms, resources, consumer preferences and products, the firms' objective is to maximize profit and the role of management is to only implement the production function. In this static market, the resources are only

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