Global Strategy Mike W. Peng c h a p t e r 88 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Strategic Management Mike W. Peng Chapter 8 Global Competitive Dynamics

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategy as Action Source: C. M. Grimm & K. G. Smith, 1997, Strategy as Action: Industry Rivalry and Coordination (p. 62), Cincinnati: Thomson South-Western. Figure 8.1

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A Comprehensive Model of Global Competitive Dynamics Industry-based considerationsResource-based considerations Concentration Valuable capabilities to attack, deter and retaliate Product homogeneity Stability of demand and supply Rarity of certain assets Industry leader Imitability of competitive actions Entry barriers Organizational skills for actions Market commonality with rivals Resource similarity with rivals Institution-based considerations Domestic competition: Primarily competition/antitrust policy International competition: Primarily trade/antidumping policy Competitive dynamics Attack/Counterattack Cooperation

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A Prisoners’ Dilemma for Airlines and Payoff Structure (assuming a total of 200 passengers) Figure 8.3

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Industry Characteristics and Possibility of Collusion vis-à-vis Competition COLLUSION POSSIBLE COLLUSION DIFFICULT (COMPETITION LIKELY)  Few firms (high concentration)  Many firms (low concentration)  Existence of an industry price leader  No industry price leader  Homogeneous products  Heterogeneous products  High entry barriers  Low entry barriers  High market commonality (mutual forbearance)  Lack of market commonality (no mutual forbearance) Table 8.1

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A Framework for Competitor Analysis Between a Pair of Rivals Sources: Adapted from (1) M. Chen, 1996, Competitor analysis and interfirm rivalry: Toward a theoretical integration (p. 108), Academy of Management Review, 21: 100–134 and (2) J. Gimeno & C. Y. Woo, 1996, Hypercompetition in a multimarket environment: The role of strategic similarity and multimarket contact in competitive de-escalation (p. 338), Organization Science, 7: 322–341. Figure 8.4

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Three Main Types of Attack GambitGambit ThrustThrustFeintFeint AttacksAttacks

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Thrust Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain spheres of influence: Resource diversion strategies (p. 729), Academy of Management Review, 23: 724–740. Figure 8.7

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Feint Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain spheres of influence: Resource diversion strategies (p. 731), Academy of Management Review, 23: 724–740. Figure 8.8

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Gambit Source: Adapted from R. G. McGrath, M. Chen, & I. C. MacMillan, 1998, Multimarket maneuvering in uncertain spheres of influence: Resource diversion strategies (p. 733), from Academy of Management Review, 23: 724–740. Copyright © Reprinted by permission of Academy of Management Review via Copyright Clearance Center. Figure 8.9

Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. How Local Firms in Emerging Economies Respond to MNE Actions Source: Adapted from N. Dawar & T. Frost, 1999, Competing with giants: Survival strategies for local companies in emerging markets (p. 122), Harvard Business Review, March-April: 119–129. Figure 8.10