Question

Identify and compare three types of rivalries and how they impact strategic management finance.

Answer 1

The three types of rivalries are

1. Developing potential customers.

2. Capturing rivals' customers.

3. Competing for sales to shared customers.

Type 1 rivalry is developing potential customers. This could be happen if there in new product and when it is hard to switch.

Example - Some customers passing a store choose to come in and continue to use it regularly, whereas other start using the competitor.

Type 2 rivalry ii capturing rivals' s customers. This could be happen whenno new customers emerge and has to buy from only one supplier.

Ex- Established customers of store may become dissatisfied with the value and switch to the competitor.

Type 3 rivalry is competing for sales to shared customers. This could be happen when no new customers emerge, all customers are disloyal so they switch purchases constantly between suppliers.

Ex- Some customers choose to use both stores. So capturing a major portion of the store visit made by the disloyal customers.

Impact of rivalries on Strategic Management finance -

1. Rivalries affects all types of strategies.

2. Rivalries has the strongest influence on the firm's business level strategies.