Four Models of Competition and their Implications for
Marketing Strategy
James E Nelson
This paper by Nelson focuses on four models
or views of competition—economic,
biological, globalization,
and social-
psychological. Each model helps understand
competition as a complex social and
individual phenomenon and draws strategic
implications for marketing managers.
James E Nelson is Associate Professor at the
College of Business Administration, University of
Colorado at Boulder, Boulder Colorado, USA.
The author gratefully acknowledges the support by the
J.
William Fulbright Foundation, the Indian Institute of
Management, Bangalore, and the University of Colorado at
Boulder, USA.
Vol. 19, No. 1, January-March 1994
This paper has two purposes. One is to improve our
understanding of competition by expanding
bases of
thought from models in economics to models from
biology, globalization, and social- psychology. As used
in this paper, "competition" is defined as a struggle
between two or more entities
for possession of some-
thing that is scarce and prized. The paper's other pur-
pose is to draw managerial implications from each
model, to provide guidance for marketing decision
makers attempting to achieve strategic competitive ad-
vantage. As used in this paper, "strategic
competitive
advantage" is defined as the long-term ability of an
enterprise to offer superior value to the marketplace
(Day and Wensley, 1988; Porter, 1985).
Essentially, then, the paper attempts to answer
these two questions:
• What does it mean to compete,
based on the four
models?
• What insights do the models give marketing
managers in making strategic decisions?
The following sections in this paper review and
explain economic, biological, globalization, and social-
psychological models of competition.
The sections
necessarily are abbreviated—the literature that details
each of these models is enormous. After each discus-
sion, the section draws managerial implications.
