Competitive Dynamics (Action-Response) Analysis

Competitive dynamics analysis studies the actual sequence of competitive moves and countermoves between specific rival firms — who attacks, who responds, how fast, and with what consequence — rather than treating competition as a static structural condition. Ming-Jer Chen's 1996 Academy of Management Review article integrated competitor analysis with interfirm rivalry by introducing two pairwise constructs, market commonality and resource similarity, and organizing the prediction of competitive behavior around awareness, motivation, and capability (AMC). Smith, Ferrier, and Ndofor's 2001 review in the Blackwell Handbook of Strategic Management synthesized the field, codifying how competitive actions and responses are measured and linked to firm performance. The approach turns rivalry into observable, codable behavior — competitive actions and responses — and explains and predicts that behavior through firm-pair relationships and capabilities.