The multifaceted nature of competitive response: Repositioning and new product launch as joint response to competition

Richard D. Wang, J. Myles Shaver

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

The literature abounds with theories on firms' response to competition, highlighting various response strategies. Although firms likely use combinations of these response strategies in practice, there is little attention to this in the literature. We investigate how firms coordinate two closely related strategies-product repositioning and new product launch. Our approach is to empirically document how firms use these strategies in response to moves by a dominant competitor, in order to provide insight and ground future theoretical development. Using data from the Chinese TV industry, we: (a) document that in most cases, firms respond to competitive approaches by simultaneously changing their position and product launch strategies; (b) interpret the nuanced response strategies that reflect the different combinations of repositioning and changes in product launch; and (c) assess which types of firms are more likely to choose these nuanced response strategies. We discuss how our findings can advance theory development of firms' responses to competition.

Original languageEnglish (US)
Pages (from-to)148-162
Number of pages15
JournalStrategy Science
Volume1
Issue number3
DOIs
StatePublished - Sep 2016
Externally publishedYes

Bibliographical note

Funding Information:
Like CCTV, the satellite TV channels enjoy national broadcast coverage. However, the satellite TV channels have fewer resources because each of them is owned and operated by a provincial TV station. Moreover, despite their government ownership status, the provincial TV stations receive limited financial support from the provincial governments. On average, government subsidy represents around 10% of a provincial TV station’s operating income (Zhao 2008).

Publisher Copyright:
Copyright: © 2017 INFORMS

Keywords

  • China
  • Competitive strategy
  • Dominant firm
  • Media industry
  • New product launch
  • Spatial competition
  • State-owned enterprises

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