Competitive Sensemaking in Value Creation and Capture

Gino Cattani (), Daniel Sands (), Joe Porac () and Jason Greenberg ()
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Gino Cattani: New York University, New York, New York 10003
Daniel Sands: New York University, New York, New York 10003
Joe Porac: New York University, New York, New York 10003
Jason Greenberg: New York University, New York, New York 10003

Strategy Science, 2018, vol. 3, issue 4, 632-657

Abstract: We suggest that a systematic socio-cognitive approach to “competitive sensemaking” has been absent from theory and research on competitive strategy. We define competitive sensemaking as the social and cognitive processes that underlie how firms detect, define, and conceptualize their competitive relationships with other firms. Competitive sensemaking is a subset of the more general process of strategic sensemaking, which is the “making plausible sense” of the broad array of stimuli and circumstances that characterize complex market situations. Using the value-based view of value creation and capture as a conceptual base for our arguments, we unpack four cognitive underpinnings of competitive sensemaking: mental time travel, comparability, counterfactual reasoning, and stories. We then show how these four components were differentially involved in shaping competitive sensemaking in four actual market situations. In doing so, we illustrate how competitive sensemaking provides fundamental inputs into the value creation and value capture process. We conclude the paper by drawing out the implications of competitive sensemaking for strategy theory and research.

Keywords: value creation and capture; sensemaking; competition; market relationships (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:3:y:2018:i:4:p:632-657

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