What You Don’t See Can Hurt You: Awareness Cues To Profile Indirect Competitors
Published in Academy of Management Journal, 2019
Recommended citation: Downing, S. T., Kang, J-S, & Markman, G. D., (2019) "What You Don’t See Can Hurt You: Awareness Cues to Profile Indirect Competitors" Academy of Management Journal, 62(6): 1872–1900. https://journals.aom.org/doi/10.5465/amj.2018.0048
Abstract
The Awareness-Motivation-Capability (AMC) framework instructs firms to be aware of rivals, yet it offers limited guidance on how to profile those who are not yet rivals but stand to become so. Because rivals are embedded in dyads, triads, tetrads, etc., a multilevel view can unearth awareness cues that specify a hostility profile and make the awareness construct prescient. Studying thousands of competitive encounters over ten years, we show that, at the firm and dyad levels, diversification and asymmetric pressure (differential exposure to competitive pressure) are reliable cues predicting competitive encounters. At the network level, convergence drives triadic encounters (competition with a rival’s rival), and the degree of separation among indirect competitors defines the outer bounds of the hostility profile. Specifically, direct rivals and 2nd- and 3rd-degree indirect competitors merit awareness—more distal players do not. Together, the awareness cues and hostility profile delineate the conceptual bound within which awareness is prescient and beyond which it is misplaced. Challenging several assumptions, our study shows that an arena view assists in predicting cross-industry competition; applying firm, dyad, and network levels of analysis is advisable to better foresee competition; and indirect competitors are “profilable,” allowing us to “see” rivals even before they strike.
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