Reasoning About Competitive Reactions: Evidence from Executives

Publication Type

Journal Article

Publication Date

2005

Abstract

Much of the empirical research on competitive reactions describes how or why rivals react to a firm's past actions, but stops short of examining whether managers attempt to predict such reactions, which we call strategic competitive reasoning. In three exploratory studies, we find evidence of managers' thinking about competitors' past and future behavior, but little incidence of strategic competitive reasoning. Competitive intelligence experts and other experienced managers' assessment of the results suggests that the relatively low incidence of strategic competitor reasoning is due to perceptions of low returns from anticipating competitor reactions more than to the high cost of doing so. Both the difficulty of obtaining competitive information and the uncertainty associated with predicting competitor behavior contribute to these perceptions. The paper suggests both a need for research on competitive behavior and an opportunity to influence and improve managerial judgment and decision making.

Discipline

Marketing

Research Areas

Marketing

Publication

Marketing Science

Volume

24

Issue

1

First Page

138

Last Page

149

ISSN

0732-2399

Identifier

10.1287/mksc.1040.0076

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