Reasoning about competitive reactions: evidence from executives

Citation

(2006), "Reasoning about competitive reactions: evidence from executives", Strategic Direction, Vol. 22 No. 1. https://doi.org/10.1108/sd.2006.05622aaf.004

Reasoning about competitive reactions: evidence from executives

Reasoning about competitive reactions: evidence from executives

Giri BC, Montgomery DB, Moore MC, Dohi T, Urbany JEMarketing Science, (USA), Winter 2005 Vol 24 No 1, Start page: 138, No of pages: 12

Purpose – To explore whether practicing managers incorporate competitor behavior, particularly the prediction of future competitor reactions to their own moves, into their own decision making in strategic market settings. Design/methodology/approach – Describes three studies that examine the incidence of competitive reasoning in marketing decisions, based on responses from practicing managers, the first comprising guided interviews with 107 managers, the second comprising decision scenarios presented to 47 executives in the Sloan Executive programme and the third comprising a survey of 96 managers. Findings: There is a low incidence of strategic competitive reasoning and attributes this to the tendency to weight more heavily decision inputs that can be assessed more easily, predicted with greater confidence, are felt to be more controllable and provide a stronger basis for justifying decisions within the organization. Points out that failures to conjecture are not necessarily harmful although suggests that, in view of the potentially considerable consequences of being blindsided by competitors, paranoia maybe the preferred mode. Research limitations/implications – States that the next step is to identify circumstances where the returns from thinking strategically about competitors exceed the costs of doing so. Originality/value – Adds to the recent stream of research and shows that attention to competitor reactions in decision making is limited.Classification(s): Top Management – LeadershipStyle: Research paperISSN: 0732-2399

Keywords: Decision making, Marketing strategy, Competition, USA, Lot size, Optimization techniques, Production planning and control, Production management, Problem solving, Net present value, Economics, Mean time to repair, Preventive maintenance, Operational research