Competitive Strategies and Behavior
The concept of competitive behavior has been a popular topic among researchers around the
World for several decades, and is a field of study that is continuously evolving as the global
competitive environment is becoming more and more complex. Given the importance of the
competitive environment, several researchers have focused on the identification of the various
competitive strategies that companies pursue in order to succeed. A recognized framework
within this field of research is Porter’s five forces and Porter’s model of generic competitive
strategies (1980, 1998, and 2004). Porter argues that from a company’s point of view, the
most important aspect of its competitive environment is the industry in which the company
competes. As Porter quoted; the industry is the “arena” where the competition takes place.
Different industries are comprised of companies that produce similar substitutes; however, the
competitive environment has a common structure which includes the following five
competitive forces:
1. Threat of new entry
2. Intensity of rivalry among existing firms
3. Pressure from substitute products
4. Bargaining power of buyers
5. Bargaining power of suppliers