Four Models of Competition and their Implications for Marketing Strategy

Social-Psychological Competition Model
 
A social-psychological model of competition focuses on 
the collective mental makeup of competitors, either 
alone or as part of a "championship team." Parallels 
come from sports, games like championship chess, and 
folklore:
 
Two boys were walking along a trail in a jungle 
when they suddenly came upon :, hungry tiger. 
While the tiger eyed them for a moment, one of the 
boys took out his running shoes from a knapsack 
and began to put them on. In a hurry. The other boy 
looked on in disbelief and said, "How stupid can 
you be! Do you think that you can outrun the tiger?" 
Said the first boy, "Oh no. I only have to outrun 
you!"
 
Such a statement captures the essence of competi-
tion at the social-psychological level. To win, com-
petitors need to know themselves, their fellow 
competitors, and the "rules of the game." They need 
knowledge and skills, creativity and a customer focus, 
and a winning attitude.
 
Knowledge and skills go hand in hand. Com-
petitors acquire knowledge about strategy and tactics 
in their industries from personal experience, trade pub-
lications, consultants, professional meetings, and each 
other. However, all this knowledge is as arid as know-
 
 
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ing the number of paper clips in a box—unless the 
knowledge can be applied. Such is the domain of skills, 
the manager's ability to make decisions, and to take 
action. Competitors acquire skills from practice, coach-
ing, and competing. Together, knowledge and skills 
(along with goals and strategy) are part of each 
competitor's preparation to win.
 
To win requires creativity and a customer focus. To 
see this, consider two ways to develop strategic com-
petitive advantage. One way may be termed "linear" 
(Chaffee, 1985): the enterprise sets long-term goals and 
allocates its resources to achieve these goals. It studies 
competitors and consumers, segments markets, 
chooses attractive target markets, designs marketing 
mixes to satisfy these targets, delivers these mixes, and 
monitors results. All this is linear, logical, and left brain 
in origin. Contrast this with the creativity and customer 
focus shown in the following example (Ohmae, 1988):
 
A Japanese appliance company was trying to 
develop a new coffee percolator. Executives 
wondered if they should follow the designs of 
General Electric or Philips and how much faster the 
new percolator should be. Ohmae urged them in-
stead to ask different questions—Why do people 
drink coffee? What are they looking for when they 
do? Consumers came back with one dominant 
answer, "Good taste." Ohmae then asked the com-
pany engineers what they were doing so that the 
design would make coffee with good taste and 
what factors influence the taste of coffee. No one 
knew.
 
After a little research, engineers uncovered three 
factors—coffee beans, water temperature, and 
water quality. So, they designed a percolator with 
a built-in dechlorinator and a built-in grinder. All 
consumers had to do was pour in water and add 
beans; the machine would do the rest. Great tasting 
coffee was assured.
 
Ohmae concluded that conventional approaches 
would not have solved the problem. Merely beating 
GE or Philips in terms of speed or capacity would 
not have created strategic competitive advantage— 
competitors would soon match or beat any design. 
And, asking consumers if they wanted coffee in 7 
minutes instead of 10 would have also led to a dead 
end—of course, they wanted coffee quicker. Be-
sides, if speed were the only issue, market research 
would say that instant coffee was the only way to
 
Go.
 
What is a winning attitude? Fundamentally, it is a 
belief in self and in the product or service that you 
market. It is a belief that you can win, that you are better 
than all competitors, and that you have the will to win. 
Chi-Chu Chen of Taiwan's International Commercial 
Bank describes this will from the perspective of the 
Taiwanese:
 
What is the difference between Taiwan and unsuc-
cessful poor countries? My conclusion is that we are 
economic animals, probably the greediest people 
on earth. The most important thing is to give the 
man in the street an incentive to work. Here self-in-
terest has been given a free rein 
(The Economist, 
1991, p 4).
 
Indeed, the whole of Southeast Asia is known for 
its optimism and its readiness to work hard to ensure 
that life will get better.