Four Models of Competition and their Implications for Marketing Strategy

Biological Model of Competition
 
A biological model of competition views competitors as 
living organisms who compete for scarce resources in a 
finite environment and are governed by laws, ethics, 
and politics. Competitors in such a model could consist 
of sets of countries, companies, products, or people. For 
example, Hong Kong, Korea, Singapore, and Taiwan 
compete via government policies and expenditure to 
attract and support various high technology industries 
(Business Week, 
1992). Hong Kong opened its University 
of Science & Technology (the "MIT of Asia") in 1991 at 
a cost of over $ 450 million—and began a $ 57 million 
investment in an Industrial Technology Centre. Korea's 
goal of becoming an "advanced nation' by 2010 means 
preferential policies, industry subsidies, and financial 
support for its Advanced Institute of Science & Technol-
ogy. Singapore "pampers" more than 1,000 multination-
als with government-sponsored staff training, tax 
breaks, and subsidies. Since 1987, Singapore has spent 
more than $ 50 million to lure 200 scientists from in-
 
6
 
stitutes around the world. Taiwan's government has 
spent millions since 1985 on efforts to establish a semi-
conductor industry and to improve infrastructure. All 
such efforts by the four countries mean that they com-
pete to some degree in high technology industries.
 
Seen as "organisms," competing countries, com-
panies, products, or people are conceived, born, ma-
ture, and die. As an example, consider the well known 
product life cycle as applied to IBM and its mainframe 
computers. Also as organisms, competitors develop 
personalities such as combative or laid-back or random, 
loose cannons. Competitors react to stimuli, learn, and 
forget. As an example, much academic and applied 
research in the US now is examining the phenomenon 
of a learning organization—how organizations can 
remain adaptive, receptive, flexible, and future-
oriented while its managers, strategies, and policies 
seem to age at a rate that increases each day.
 
Competitors in a biological model compete for 
scarce resources. According to Lambkin and Day (1989), 
primary resources in markets include product and 
process technologies that enable products to be com-
mercialized, refined, and improved; input materials 
and systems that determine the cost and attractiveness 
of finished products in the market; infrastructure that 
may hasten or delay market penetration; and the 
market's regulatory environment. Industry resources in 
markets include distribution channels, suppliers, and 
sources of capital and personnel. All such resources are 
finite and captured by competitors in varying quan-
tities. Indeed, several scholars in marketing have 
proposed that many markets evolve to a "natural 
market structure" consisting of leaders, challengers, fol-
lowers, and nichers (with market shares of roughly 40, 
30, 20, and 10 per cent, respectively). Finally, as a 
market's number of competitors increases or its 
demand falls, the market's resources may not be able to 
support the entire population.
 
Beyond these basic ideas of biological competition 
are numerous related ideas. Markets and products 
evolve over time, with the trend inexorably toward 
more environmental efficiency, more complexity, and 
more diversity (Tellis and Crawford, 1981). Some com-
petitors become extinct, some mutate, some mate, some 
divorce. For many enterprises, the ability to reproduce 
rapidly and exactly is a key success factor (McDonalds, 
as an example). Competitors may only emulate each 
other; they cannot clone or duplicate each other. Some-
times, a small change in one organism sets off a chain
 
Vikalpa 

---

of interrelated changes in many others that greatly im-
pacts an environment.