Four Models of Competition and their Implications for Marketing Strategy

Strategic Implications of the 
Social-Psychological Model
 
• To achieve strategic competitive advantage you 
must be able to think analytically and yet creatively 
about your company, your customers, and your 
competitors. Your aim is to create a strategy that 
exploits your unique strengths as a competitor in 
creating long-term customer satisfaction. 
• A company's marketing strategy can intimidate its 
competitors. Good marketing strategies position a 
company such that its competitors want to avoid a 
head-on attack. Its product may be so superior, its 
sales force so outstanding, and its customers so 
satisfied that competitors will focus instead on each 
other (or on other markets). Thus, a company's best 
marketing "battles" are the ones that are never 
fought. 
• One must know the character, attitudes, motives, 
capabilities, and habitual behaviour of a competitor 
if you wish to have an advantage. As an executive 
described his competitive counterpart, "I know him 
from when we were together at GE. I know how he 
thinks, how he worries, how he plans. I know what 
he's doing right now and can predict what he'll do 
once our strategy becomes known." In 
The Art of 
War, 
the famous military strategist Sun Tzu says, 
"Know the enemy and know yourself, and in a 
hundred battles you will never be in peril." 
• One must know as accurately as possible just what 
your competition has at stake (Henderson, 1979). It 
is not what you gain or lose but what competitors 
gain or lose that sets limits on what they are likely 
Vol. 19, No. 1, January-March 1994 
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to do. Desperate competitors take desperate ac-
tions.
 
• One should choose competitors to attack and to 
avoid. Most ,of the time it is best to attack com 
petitors against which you think you have-a good 
chance of winning. However, every so often you 
must compete against a superior opponent—how 
else will you ever become a better competitor? Be 
sides, you just might win and you almost certainly 
will learn from the experience. 
• One should build a company around people who 
like to compete and who like to win. A sales 
manager at Procter & Gamble in the US recruits and 
hires only student athletes from NCAA Division I 
universities. "For entry level sales positions, they 
are the best competitors," he explained. "They may 
not be the smartest kids on campus but they are 
probably the most dedicated. How else could they 
compete for four years and still earn a degree? They 
know what hard work means and they know what 
it takes to win." He might also have added that they 
take direction or coaching very well and constantly 
seek to improve their skills. 
• Getting to the top is one thing; staying there is 
another. Almost all competitors (countries, com 
panies, products, people) seem to have difficulty 
maintaining a leadership position for an extended 
period of time. Partly, the difficulty may 
be 
due to 
a failure of a competitive advantage to be sus 
tained—other competitors copy or out-engineer the 
advantage and it disappears. Partly, the difficulty 
is a matter of attitude and hard work (it certainly 
should not be a matter of resources). Companies 
that overcome the difficulty sometimes are called 
"killer competitors." They hold the attitude that 
capturing the 80th share point in a market is every 
bit as important as capturing the 20th. 
• Competitors need regular feedback on the success 
or failure of their strategies and their competitors' 
strategies. Individuals cannot excel unless they 
know how well or how poorly they are doing. 
• Good or great individual competitors sometimes 
make poor competitors on a team. For a team to 
succeed means having "team players," who can 
control their egos, ambitions, and action for the 
good of the team. Successful teams also have good 
leaders, good coaches, and good strategies. Good 
strategies capitalize on each team member's unique 
ability to the fullest. 
 
In sum, a social-psychological model of competition 
focuses on individuals, either alone or as integral 
members of a team. Thus, knowledge, skills, creativity,
 
and attitudes lead to superior strategy. Winners think, 
sacrifice, take chances, compete aggressively, and per-
severe. Losers react, let emotion influence their 
decisions, lack tenacity, and blame others.