Thus, as former General Electric CEO Jack Welch noted in his autobiography, success in most competitive rivalries “is less a function of grandiose predictions than it is a result of being able to respond rapidly to real changes as they occur. Pepsi’s spring 2004 announcement of a mid-calorie cola introduction was quickly followed by a similar announcement by Coke, signaling that Coke would not allow this niche to be dominated by its longtime rival. In contrast, fast responses tend to prevent such an edge. households had purchased the beverage by August 2003, and 90 million cases had been sold. In the interim, Vanilla Coke carved out a significant market niche 29 percent of U.S. For example, PepsiCo made the mistake of waiting fifteen months to copy Coca-Cola’s May 2002 introduction of Vanilla Coke. If there is a long delay between an attack and a response, this generally provides the attacker with an edge. If a firm is going to respond to a competitor’s move, doing so quickly is important. Speed KillsĮxecutives in many markets must cope with a rapid-fire barrage of attacks from rivals, such as head-to-head advertising campaigns, price cuts, and attempts to grab key customers. Competition with Walmart later drove Kmart into bankruptcy. But it wasn’t until fairly recently that they took him seriously.” While the threat of Walmart growth was apparent to some observers, Kmart executives failed to respond. A former member of Kmart’s board of directors lamented, “I tried to advise the company’s management of just what a serious threat I thought was. In discussing Kmart’s parent corporation (Kresge), a stock analyst at that time wrote, “While we don’t expect Kresge to stage any massive invasion of Walmart’s existing territory, Kresge could logically act to contain Walmart’s geographical expansion.…Assuming some containment policy on Kresge’s part, Walmart could run into serious problems in the next few years.” Kmart executives also received but ignored early internal warnings about Walmart. The poor response by Kmart and other retailers to Walmart’s growth in the late 1970s illustrates this point.
#Who are spring venture group competitors series#
Figure 6.11: Competitive Tension: The A-M-C Framework Īlthough examining a firm’s awareness, motivation, and capability is important, the results of a series of moves and countermoves are often difficult to predict and miscalculations can be costly. Indeed, Gillette made a preemptive strike with the introduction of the Sensor 3 and Venus Devine a month before the Schick Quattro’s projected introduction. Because all three factors were high, a strong response was likely. Finally, Gillette was very capable of responding, given its vast resources and its dominant role in the industry. Shaving products are a vital market for Gillette, and Schick has become an increasingly formidable competitor since its acquisition by Energizer.
Gillette’s motivation to respond was also high. Therefore, its main competitor, Gillette, was well aware of the move. This move was widely publicized and supported by a $120 million advertising budget. Figure 6.10: Responding to Rivals’ Moves Īn analysis of the “razor wars” illustrates the roles that these factors play (Ketchen, Snow, & Street, 2004). Consider Schick’s attempt to grow in the razor-system market with its introduction of the Quattro. These three factors together determine the level of competition tension that exists between rivals ( Figure 6.11 “Competitive Tension: The A-M-C Framework”). Research indicates that three factors determine the likelihood that a firm will respond to a competitive move: awareness, motivation, and capability.
#Who are spring venture group competitors how to#
Figuring out how to react, if at all, to a competitor’s move ranks among the most challenging decisions that executives must make. In addition to choosing what moves their firm will make, executives also have to decide whether to respond to moves made by rivals ( Figure 6.10 “Responding to Rivals’ Moves”). Understand the importance of fighting brands as a competitive response.Explain two ways firms can respond to disruptive innovations.Describe how mutual forbearance can be beneficial for firms engaged in multipoint competition.Understand the importance of speed in competitive response.Know the three factors that determine the likelihood of a competitor response.
0 kommentar(er)
