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Are competitive reactions changing over time?

Jimi Park ( Korea University Business School Seoul Korea (the Republic of) )
Shijin Yoo ( Korea University Business School Seoul Korea (the Republic of) )

Management Decision

ISSN: 0025-1747

Article publication date: 3 March 2016

Abstract

Purpose

This study attempts to answer why the predominant competitive reaction is non-reactive one in the previous literature by showing that some fluctuations of competitive reactions (CR) may average out to zero.

Design/methodology/approach

This research proposes a model for measuring competitive reaction volatility to examine whether a firm’s CR differs over time. A rolling-windows time series approach is applied to three different datasets.

Findings

The results show that firms indeed react to each other, but the types of reactions vary over time, thereby creating a misunderstood “no-reaction” in the literature.

Practical implications

This study may help understand the gap between academic findings (i.e., no-reaction) and managerial reality (i.e., marketing wars).

Originality/value

Although a firm’s CR should be understood as a series of managerial actions that may change over time, the extant literature has not considered this temporal variation of CR. This paper provides a systematic review of the empirically based literature and provides insights into the importance of strategic variation in competitive dynamics.

Citation

Park, J. and Yoo, S. (2016), "Are competitive reactions changing over time?", Management Decision, Vol. 54 No. 3. https://doi.org/10.1108/MD-08-2015-0357

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited