CHAPTER 11: Competitor Interaction

Knowing the competition and determining how to win against the competition are critical to competitive strategy. This chapter provides frameworks, tools, and concepts to build skills in these areas. Frameworks include the strategy canvas, strategic group maps, and competitive response profiles. The chapter also provides an introduction to game theory and shows how this logic is used by firms in their competitive choices. The chapter identifies several principles of competitive strategy such as, “Bring strength against weakness” and illustrates how firms employ these strategies to gain competitive advantage in their markets. The chapter also explores how different market environments—those of perfect competition, oligopoly, and monopoly—determine the set of competitive actions that are likely to have the most success.