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ANALYSES OF EXTERNAL ENVIRONMENT. COMPETITIVE DYNAMICS

Q: Why are quick responses important in business strategy?

Profit advantages of imitation with 'fast second strategy' Cost advantages from learning and improving upon rival's mistakes Aggressive marketing mix reactions recommended for preventing major market share and profitability advantages Prevention of building barriers and signaling incumbent commitment to defend market positions .

51 important questions on ANALYSES OF EXTERNAL ENVIRONMENT. COMPETITIVE DYNAMICS

What is the main focus of the study by Boyd, J. L. and Bresser, R. K. (2008) on performance implications in the U.S. retail industry?

Investigates the timing and consequences of competitive responses
Studies relationship between response delay and performance
Examines performance implications of different response timings

What are the theoretical predictions regarding the relationship between response delay and performance in the study?

Predicts negative linear relationship between delay and responder performance
Predicts opposing positive linear relationship between delay and first mover performance

What were the study findings related to response delay and performance in the U.S. retail industry?

Response delay has curvilinear relationship with responder performance
Response delay has linear relationship with first mover performance

What are some implications highlighted in the study regarding competitive dynamics and management strategies?

Implications for understanding competitive dynamics and management strategies
Study contributes to theory of first mover and follower advantages
Emphasizes consequences of fast vs. delayed competitive responses

Why are quick responses important in business strategy?

Profit advantages of imitation with 'fast second strategy'
Cost advantages from learning and improving upon rival's mistakes
Aggressive marketing mix reactions recommended for preventing major market share and profitability advantages
Prevention of building barriers and signaling incumbent commitment to defend market positions.

What are some potential advantages of delayed responses in business strategy?

Delayed responses allow firms to gather more information about competitors' actions
Delayed responses provide time to resolve market or technological uncertainties
Delayed responses enable the development of more effective responses, like a better product or superior marketing program.

How can the effectiveness of response timing be explained in business strategy?

Firms must balance the risks of premature entry and delayed response
A curvilinear relationship suggests lower success for fast and late responders, and higher success for responders with intermediate delays.

What does theoretical research suggest about response timing in business strategy?

Theoretical research generally argues for attacked incumbents to respond as quickly as possible
A negative linear relationship exists between response delay and responder performance.

What are some key factors that play a role in the performance effect of response timing in business strategy?

Firms must accurately assess market dynamics and develop effective responses
Balancing risks of premature entry and delayed response is crucial for performance.

Why are responders with intermediate delays expected to outperform both fast and late responders according to business strategy theory?

Intermediate delays allow for designing an appropriate response
Responders with intermediate delays avoid the pitfalls of both responding too early and too late.

What are the reasons for too fast responses to competitive challenges?

Incorrect analysis leading to the belief that quick market share build-up is essential.
Stakeholder expectations pushing for rapid actions.
Strategies aimed to discourage or outpace the competitor.

What causes firms to respond to competitive challenges too slowly?

Misjudgment of time needed to craft an effective response.
Pursuit of acquiring additional resources.
Changes in firm strategy and routines that take time to implement.

What blind spots lead to judgmental mistakes in too fast responses?

Viewing a competitive action as an exaggerated threat.
Increasing risk-taking due to poor performance.
Ignoring the time required for an effective response by competent individuals.

What are the blind spots that cause judgmental mistakes in too slow responses?

Inaction due to a firm's bureaucracy, age, or size.
Doubling down on commitments despite threats.
Underestimating competitive challenges by capable individuals.

What are the factors influencing conscious choices in responding to market dynamics?

Based on correct analysis of market dynamics.
Responder consciously deviates from appropriate timing scenario.
Acceptance of risk by responding too early or too late.

What are blind spots that lead to timing errors in strategic decision-making?

Errors due to incomplete or incorrect analysis of information.
Inappropriate decisions from blind spots in competitor analysis.
Cognitive biases causing judgmental mistakes.

What are examples of cognitive biases that may cause blind spots and judgmental mistakes in decision-making?

Not recognizing significance of events like strategic moves.
Misinterpreting significance of events.
Slow recognition of significant events.

What are the three types of blind spots in strategic decision-making mentioned in the text?

Competitors using a limited perspective for competitive problems.
Engaging in non-rational escalation of commitment.
Exhibiting unjustified overconfidence in judgment and abilities.

How is first mover performance and response delay hypothesized to be related?

Linearly, with shorter response delays leading to greater performance decreases.
Longer response delays giving pioneers the chance to establish first mover advantages.

What advantages are associated with long response delays for first mover firms?

Technological leadership.
Buyer switching costs.
Establishment of first mover benefits.

What did the event study in the retail industry focus on?

Examined 17 largest U.S. department and variety stores.
Covered the period from 1994 to 2000.
Used structured content analysis of press articles and newswire reports as primary data collection methods.

What is the relationship between response delay and stock effects for different competitive moves according to the study?

An inverse U-shaped relationship is confirmed by a negative coefficient (-0.217) for squared response delay.
Average effects:
- Fast and late responders see lower stock effects.
- Intermediate responders experience higher stock effects.
For first movers, a positive coefficient (0.328) for response delay indicates increased stock effects with delay.

What are the research implications and limitations discussed in the study?

Caution needed for fast competitive responses
Need to focus on factors leading to errors in rapid responses
Exploration of resources like managerial experience on response timing and performance
Influence of institutional pressures on competitive actions

What are the recommendations for future research based on the study findings?

Investigate if the relationships hold true in different industries
Explore other performance indicators beyond shareholder wealth effects
Consider a larger sample size for more nuanced insights

What should managers keep in mind concerning response time in decision-making processes?

Risk of being slow to respond
Risk of acting too quickly
Need to be aware of pitfalls of being overly reactive
Importance of striking a balance between acting quickly and missing opportunities

What is the study focus of Nadkarni, Chen, and Chen (2016)?

Examines the interplay between executive temporal depth and industry velocity
Investigates how this interplay affects competitive aggressiveness and firm performance

What are the findings of the study by Nadkarni, Chen, and Chen (2016)?

Executive temporal depth has different relationships with competitive aggressiveness in low- versus high-velocity industries
Competitive aggressiveness positively impacts firm performance, especially in high-velocity industries

What is the main contribution of the study by Nadkarni, Chen, and Chen (2016)?

Addresses the gap in understanding how executives' temporal orientations influence competitive behaviors
Explores the relationship between temporal depth, industry velocity, competitive aggressiveness, and firm performance

What does the theory of temporal depth encompass based on the study by Nadkarni, Chen, and Chen (2016)?

Includes the temporal distance executives consider in the past and future
Short time horizons offer flexibility but risk temporal myopia, while long horizons provide foresight but delay adaptation

How is industry velocity defined in the study by Nadkarni, Chen, and Chen (2016)?

It is the rate at which new opportunities emerge and disappear in an industry
Determines the pace of technological obsolescence, product turnover, and competitive actions for firms

What does competitive aggressiveness refer to as explained in the study by Nadkarni, Chen, and Chen (2016)?

It is the tendency of a firm to directly challenge rivals to improve or maintain its market position
Reflects a willingness to engage in intense competition to achieve strategic goals

What are the pros of a long Past Temporal Depth (PTD)?

Promotes a deeper understanding of the past
Increases relevance of prior situations in solving current problems quickly
Reduces errors and false starts in initiating actions like new product introduction

What are the cons of a long Past Temporal Depth (PTD)?

Can filter out critical aspects of the current context
May lead to considering outdated information
Can result in errors and backtracking into evaluations of strategic alternatives

What are the pros of a long Future Temporal Depth (FTD)?

Promotes pattern recognition for visualizing long-term future changes
Helps foresee and prepare for potential environmental opportunities and threats
Enhances competitiveness of firms in the marketplace by promoting foresight of management

What are the cons of a long Future Temporal Depth (FTD)?

Can make executives overcommitted to long-term goals
Undermines ability to adjust to critical short-term changes
Creates rigidities that blind managers to short-term environmental conditions

How does executive temporal depth influence competitive aggressiveness?

Creates temporal filters that influence executives' awareness of competitive landscape significance
Affects consideration of competitive alternatives
Shapes competitive behaviors of firms

What is competitive aggressiveness, and what does it involve?

Reflects how intensely a firm engages with rivals through strategies and practices
Involves market actions like price changes and product alterations
Actions are used annually to get ahead of or respond to rivals

What are the benefits of competitive aggressiveness?

Allows firms to proactively seize new opportunities and shorten rivals' advantages
Increases volume of actions and speed of responses to rivals
Helps address the time-dependent nature of competitive advantage effectively

What is industry velocity and what are its characteristics in high-velocity industries?

Industry velocity, also known as industry clock speed, reflects the speed at which new opportunities emerge and disappear.

High-velocity industries are characterized by:
- High rates of new product introductions, technological changes, and competitive actions.
- Rapid creation and destruction of competitive advantages.
- Compression of temporal window of opportunities due to high levels of competitive activity.

What are the characteristics of low-velocity industries and their impact on incumbents?

Low-velocity industries have fewer and rarer changes in products, technologies, and competitive actions.

Incumbents in low-velocity industries:
- Enjoy longer temporal windows of opportunities.
- Benefit from more sustainable advantages from existing competitive actions.

How does industry velocity impact the moderation of the relationship between executive PTD and competitive aggressiveness?

Industry velocity moderates the relationship between executive PTD and competitive aggressiveness.

In low-velocity industries, the relationship is positive as incumbents have longer temporal windows of opportunities.
In high-velocity industries, the relationship is negative due to rapid changes and short product life cycles.

What are the effects of industry velocity on executive decision-making in low-velocity industries?

In low-velocity industries, the effects of industry velocity on executive decision-making are significant.

Incumbents benefit from longer temporal windows of opportunities to detect hidden threats and initiate competitive actions.
Executives can draw on historical patterns and combine more information for better decision-making.

How does industry velocity influence executive decision-making in high-velocity industries?

In high-velocity industries, industry velocity significantly impacts executive decision-making.

Short product and process life cycles limit the usefulness of past knowledge.
Looking too far back may lead to miscalculations and reduce awareness of short-term changes.

How does industry velocity moderate the relationship between executive Future Temporal Depth (FTD) and competitive aggressiveness in low-velocity industries?

FTD promotes acute awareness of the competitive environment
FTD alerts to potential distant future developments
FTD allows proactive recognition of opportunities and threats
FTD results in greater competitive aggressiveness

What are the effects of Future Temporal Depth (FTD) in high-velocity industries?

Longer FTD can hinder competitive aggressiveness beyond a certain point
Overly long FTD may reduce awareness of short-term changes
Long-term predictions are difficult due to rapid changes
Limited concrete details about distant future events can be deduced in advance

How does industry velocity moderate the relationship between competitive aggressiveness and firm performance?

Competitive advantage is temporary in fast-changing environments
Actions become obsolete quickly in fast-changing environments
Competitive aggressiveness is crucial for survival and success in fast-changing environments

How does competitive aggressiveness differ in slow-changing environments?

Competitive advantage may be relatively more sustainable in slow-changing environments
Not acting quickly and intensely has less devastating consequences in slow-changing environments

What are the independent, moderator, and dependent variables in the study?

Independent variable:
- Past Temporal Depth (PTD)
- Future Temporal Depth (FTD)
- Industry velocity (low vs. high)
- Competitive aggressiveness
Moderator variable:
- Not specified
Dependent variable:
- Firm performance (ROS & ROA)

What conclusions were drawn from the results of the interaction between Executive FTD Square and Industry Velocity?

The interaction term is significant
Future Temporal Depth (FTD) is positively related to competitive aggressiveness in low-velocity industries
In high-velocity industries, a positive FTD term and negative FTD square term show an inverted U-shaped relationship
Hypothesis 2 (H2) is supported

What is noted about the effect of Industry Velocity × Competitive Aggressiveness on firm performance, especially in high-velocity industries?

It has a positive effect on firm performance, particularly in high-velocity industries
The effect is marginally significant with p < 0.1
Hypothesis 3 (H3) is marginally supported

What limitations were identified in the findings presented?

Applicability to diversified firms facing multimarket competition may not be direct
Time frame limitation with a unique period for competitive interactions may affect generalizability

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