Strategic competition: Difference between revisions
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Jcborja112 (talk | contribs) New reference with more info. |
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Strategic Competition is defined as a group of commitments within an organization or firm that seeks to make a very large change in competitive relationships. One of the main principles of strategic competition is that the response of an organization regarding another one's introduction of a new product defines the impact of such in the market.This type of competition has proven itself useful when trying to explain a firm's executive compensation schemes, leading to time compensation<ref name=":0">{{Cite book|title=The Boston Consulting Group on Strategy|last=Stern|first=Carl|last2=Deimler|first2=Michael|publisher=John Wiley & Sons, Inc.|year=2006|isbn=978-0-471-75722-1|location=New Jersey, USA|pages=2-7}}</ref><ref>{{Cite journal|last=Chen|first=Sheng-Syan|last2=Ho|first2=Kim Wai|last3=Ik|first3=Kueh Hwa|last4=Lee|first4=Cheng-few|date=2002-01-01|title=How Does Strategic Competition Affect Firm Values? A Study of New Product Announcements|url=http://www.jstor.org/stable/3666223|journal=Financial Management|volume=31|issue=2|pages=67–84|doi=10.2307/3666223}}</ref> |
Strategic Competition is mainly a management, defined as a group of commitments within an organization or firm that seeks to make a very large change in competitive relationships. One of the main principles of strategic competition is that the response of an organization regarding another one's introduction of a new product defines the impact of such in the market.This type of competition has proven itself useful when trying to explain a firm's executive compensation schemes, leading to time compensation<ref name=":0">{{Cite book|title=The Boston Consulting Group on Strategy|last=Stern|first=Carl|last2=Deimler|first2=Michael|publisher=John Wiley & Sons, Inc.|year=2006|isbn=978-0-471-75722-1|location=New Jersey, USA|pages=2-7}}</ref><ref>{{Cite journal|last=Chen|first=Sheng-Syan|last2=Ho|first2=Kim Wai|last3=Ik|first3=Kueh Hwa|last4=Lee|first4=Cheng-few|date=2002-01-01|title=How Does Strategic Competition Affect Firm Values? A Study of New Product Announcements|url=http://www.jstor.org/stable/3666223|journal=Financial Management|volume=31|issue=2|pages=67–84|doi=10.2307/3666223}}</ref> |
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Within a market where strategic competition is present, investment provides a much bigger capability of taking advantage of future opportunities of growth which also implies obtaining a greater [[market share]]. If such interaction between rivals is efficiently used, even all actors of the industry in which strategic competition was applied may be compensated on their profits. This is implemented either by putting [[Barriers to entry|entry barriers]] to new competitors or to dissuading others from 'making space' for stronger ones.<ref>{{Cite web|url=http://realoptions.org/papers2004/BoyerGravelLasserre.pdf|title=Real Options and Strategic Competition: A survey|last=Boyer|first=Marcel|last2=Gravel|first2=Éric|date=May 2004|website=Real Options|archive-url=|archive-date=|dead-url=|access-date=9 May 2017|last3=Lasserre|first3=Pierre}}</ref><ref>{{Cite web|url=http://www.nber.org/papers/w5648.pdf|title=Executive Compensation, Strategic Compensation, and Relative Performance Evaluation: Theory and Evidence|last=Aggarwal|first=Rajesh|date=July 1996|website=National Bureau of Economic Research|archive-url=|archive-date=|dead-url=|access-date=9 May 2017}}</ref> |
Within a market where strategic competition is present, investment provides a much bigger capability of taking advantage of future opportunities of growth which also implies obtaining a greater [[market share]]. If such interaction between rivals is efficiently used, even all actors of the industry in which strategic competition was applied may be compensated on their profits. This is implemented either by putting [[Barriers to entry|entry barriers]] to new competitors or to dissuading others from 'making space' for stronger ones.<ref>{{Cite web|url=http://realoptions.org/papers2004/BoyerGravelLasserre.pdf|title=Real Options and Strategic Competition: A survey|last=Boyer|first=Marcel|last2=Gravel|first2=Éric|date=May 2004|website=Real Options|archive-url=|archive-date=|dead-url=|access-date=9 May 2017|last3=Lasserre|first3=Pierre}}</ref><ref>{{Cite web|url=http://www.nber.org/papers/w5648.pdf|title=Executive Compensation, Strategic Compensation, and Relative Performance Evaluation: Theory and Evidence|last=Aggarwal|first=Rajesh|date=July 1996|website=National Bureau of Economic Research|archive-url=|archive-date=|dead-url=|access-date=9 May 2017}}</ref> |
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== Further Reading == |
== Further Reading == |
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* Paul van Hooft - University of Amsterdam: [http://cris.unu.edu/sites/cris.unu.edu/files/WP%2032_GREEN_van%20Hooft.pdf Multipolarity, Multilateralism, and Strategic Competition] ''ERASMUS Mundus Joint Doctorate-2010'' |
* Paul van Hooft - University of Amsterdam: [http://cris.unu.edu/sites/cris.unu.edu/files/WP%2032_GREEN_van%20Hooft.pdf Multipolarity, Multilateralism, and Strategic Competition] ''ERASMUS Mundus Joint Doctorate-2010'' |
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* Demartini, C.; Mella, P. (2011). [http://file.scirp.org/pdf/IB20110200004_80842697.pdf Time Competition. The New Strategic Frontier]. Scientific Research. |
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== References == |
== References == |
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Revision as of 00:45, 10 May 2017
Strategic Competition is mainly a management, defined as a group of commitments within an organization or firm that seeks to make a very large change in competitive relationships. One of the main principles of strategic competition is that the response of an organization regarding another one's introduction of a new product defines the impact of such in the market.This type of competition has proven itself useful when trying to explain a firm's executive compensation schemes, leading to time compensation[1][2]
Within a market where strategic competition is present, investment provides a much bigger capability of taking advantage of future opportunities of growth which also implies obtaining a greater market share. If such interaction between rivals is efficiently used, even all actors of the industry in which strategic competition was applied may be compensated on their profits. This is implemented either by putting entry barriers to new competitors or to dissuading others from 'making space' for stronger ones.[3][4]
Basic Elements
Strategic Competition is comprised of five basic elements:
- To comprehend competitive interaction as a dynamic system.
- To use such comprehension in order to forecast the effects of any intervention in that system.
- To dispose of many uncomitted resources that can be applied to diverse purposes.
- To predict the risk and return with enough accuracy for justifying the use of these resources.
- To possess the necessary will to set the necessary towards such commitment. [1]
Uses in Other Areas
Not only strategic competition is applied to the business area but also to other ones such as political science and international relations.
This is because it brings about distinctive outcomes linked to capital structure.[5] For example, the current status of Syria have provided a fertile terrain for strategic competition of the many actors involved in the conflict. This element is likely to persist well beyond any formal resolution of the conflict.[6] Another example of this, is the current growing economic and strategic competition of US and China in Southeast Asia. [7]
External Links
- [1]- How Does Strategic Competition Affect Firm Values? A Study of New Product Announcement
Further Reading
- Paul van Hooft - University of Amsterdam: Multipolarity, Multilateralism, and Strategic Competition ERASMUS Mundus Joint Doctorate-2010
- Demartini, C.; Mella, P. (2011). Time Competition. The New Strategic Frontier. Scientific Research.
References
- ^ a b Stern, Carl; Deimler, Michael (2006). The Boston Consulting Group on Strategy. New Jersey, USA: John Wiley & Sons, Inc. pp. 2–7. ISBN 978-0-471-75722-1.
- ^ Chen, Sheng-Syan; Ho, Kim Wai; Ik, Kueh Hwa; Lee, Cheng-few (2002-01-01). "How Does Strategic Competition Affect Firm Values? A Study of New Product Announcements". Financial Management. 31 (2): 67–84. doi:10.2307/3666223.
- ^ Boyer, Marcel; Gravel, Éric; Lasserre, Pierre (May 2004). "Real Options and Strategic Competition: A survey" (PDF). Real Options. Retrieved 9 May 2017.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Aggarwal, Rajesh (July 1996). "Executive Compensation, Strategic Compensation, and Relative Performance Evaluation: Theory and Evidence" (PDF). National Bureau of Economic Research. Retrieved 9 May 2017.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Thu Thuy, Nguyen (2008). Capital Structure, Strategic Competition and Governance. Erasmus Research Institute of Management. ISBN 978-90-5892-178-9.
- ^ Martini, Jeffrey (2013). "Syria as an Arena of Strategic Competition" (PDF). RAND Corporation. Retrieved 9 May 2017.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Ming-Te, Hung; Tai-Ting, Tony Liu (2011). "Sino.U.S. Strategic Competition in Southeast Asia: China's Rise and U.S. Foreign Policy" (PDF). Political Perspectives. Retrieved 9 May 2017.
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