Abstract:

Competitive dynamics is a phenomenon that is becoming more evident in many industries, even in those that were considered relatively stable until recently. There has been an alternation in the competitive conditions in various industries, i.e. hypercompetitive shift, visible through a sudden increase in competitive activity, greater variability in the profitability of the industry, as well as in noticeable changes in market shares (Ferrier, Smith and Grimm, 1999). Theoretical approach of competitive dynamics shows that relationship between firm´s strategy and firm performance primarily depends on firm strategic behavior, but also on competitors´ behavior and interactions between them. (Grimm, Lee, and Smith, 2006). The goal of this paper is to theoretically and empirically indicate the relationship between firms’ strategic pattern – certain behavior and gaining competitive advantage in hypercompetitive industries. Although a growing number of empirical studies dealing with the issue of achieving and maintaining competitive advantage in an era of hypercompetition could be seen, they were primarily focused towards analyzing competitive dynamics and its impact on the financial performance of the firms. In his longitudinal study, Chen shows that the most important factors that influence firm strategic behavior include context recognition and motivation and ability to undertake actions (Chen, 1996). Firm´s abilities should encompass organizational preconditions for strengthening its competitive potential (Ferrier, 2001), as well as individual assumptions of firm´s strategic decision makers (Bazerman and Schoorman, 1983; Goodstein, and Escalas, 1994). Ferrier shows the faster the decision-making process related to action implementation is, the increase in the market share of the firm will be more visible (Ferrier, 2001; Smith, Ferrier and Grimm, 2001). Thus, the main intention of this paper is to define and examine the link between firms’ strategic behavior in dynamic environment and achieving competitive advantage that could be indicated not only through financial performance indicators but also through some particular indicators of firm performance compared to the largest rival.