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Preventing potential negative effects of competitive actions in the supply market

Klamor, Jana (2015) Preventing potential negative effects of competitive actions in the supply market.

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Abstract:Current supply management literature advises firms to conduct a high degree of competitive actions, highlighting their positive impact but fails to acknowledge competitive rivalry and potential negative effects of competitive supply management actions on a firm’s performance. In particular, research ignores not only the effect competitive actions have on the rivalry in supply markets but also potential (re)actions of rivals to a firm’s competitive supply management action. Thereby firms fail to integrate likely responses by rivals to their action(s) in an effective supply management strategy. Examples from the product market and research in the field of strategic management revealed that this missing integration can be highly risky for firms. The concept of competitive dynamics, particularly its competitive rivalry stream, theorizes about the competitive nature of actions and reactions in markets and has found that a too high degree of competitive actions can harm a firm’s performance induced by increased rivalry. However, so far these potential negative effects of a high competitive action level have only been researched in product markets and not acknowledged by strategic supply management literature. This paper attempts to address this research gap by analyzing the application of the competitive rivalry stream on strategic supply management. In particular, this research aims to contribute to current supply management literature by theorizing on how the potential negative effects of high competitive action levels that have been observed in product markets apply to competitive actions in the supply market. A further objective of this study was to evaluate how supply managers might prevent these potential negative effects. This approach provides new insights into the strategic implications of competitive supply management actions and opens up to managerial actions by supporting supply managers to decide on the right action level for their firm which avoids the potential negative effects.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/67344
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