Reasoning About Competitive Reactions: Evidence from Executives

David B. Montgomery (), Marian Chapman Moore () and Joel E. Urbany ()
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David B. Montgomery: Stanford Graduate School of Business, Stanford, California 94305-5015, and Singapore Management University, 469 Bukit Timah Road, Singapore 259756
Marian Chapman Moore: Darden Graduate School of Business, University of Virginia, 100 Darden Boulevard, Charlottesville, Virginia 22906
Joel E. Urbany: Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana 46556

Marketing Science, 2005, vol. 24, issue 1, 138-149

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 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.

Keywords: competitive reaction; competitive analysis; marketing strategy; managerial decision making (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:24:y:2005:i:1:p:138-149

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