The cost of failing to react to competition can be exceptionally high: challengers often topple market leaders. An examination of how resources influence the way managers weigh up competitors suggests companies need to remain vigilant if they are to fight back effectively.
Resources are essential to competitiveness but for companies fending off a rival they can be a double-edged sword if they also encourage complacency that results in inertia. While having resources can make decision-makers think they are able to react effectively to a competitive new product, they can also stifle their motivation to do so.
A new study by Marion Debruyne, Ruud Frambach and Rudy Moenaert, “Using the Weapons You Have: The Role of Resources and Competitor Orientation as Enablers and Inhibitors of Competitive Reaction to New Products”, sheds light on this paradox by exploring how decision-makers assess and react to competition.
Published on 29/11/2011