Global competitive dynamics PDF

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Global competitive dynamics...

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GLOBAL COMPETITIVE DYNAMICS Competitive dynamics = actions and responses undertaken by competing firms. Competitor analysis = the process of anticipating rival’s actions in order to both revise a firm’s plan and prepare to deal with rival’s responses.

OPENING CASE. PATENT WARS AND SHARK ATTACKS

There is awash in a sea of junk patents, massive over-patenting and a patent epidemic. Patent wars = Firm A sues Firm B for patent infringement but B digs through its own patent portfolio and discovers that some of its own patents are infringed by A. B countersues A. To avoid costly and mutually destructive exchange of patent lawsuits, both firms will typically reach cross-licensing deals that give each other the rights to the patents after some exchange of money. To be part of these exchanges, a firm needs to have a sufficiently large hoard of patents. (Google bought Motorola because of its patents) Patent sharks or trolls = Patent holding individuals or firms that legally challenge manufacturers for patent infringement in order to receive damage awards. Trolls hope to be infringed and do everything they can to stay as invisible as possible.

(1) STRATEGY AS ACTION

Strategy as action perspective The essence of strategy is interaction, actions and reactions that lead to competitive advantage. Multimarket competition Occurs when firms engage the same rivals in multiple markets. Firms recognize rival’s ability to retaliate in multiple markets, such multimarket competition may result in a reduction of competitive intensity among rivals Mutual forbearance

Multimarket firms respect their rival’s spheres of influence in certain markets and their rivals reciprocate, leading to tacit collusion....