Four Models of Competition and their Implications for Marketing Strategy

Strategic Implications of the Biological Model 
• Only the fittest competitors survive. Eat or be eaten. 
Live high on the food chain. Such adages stress that 
biological competition is competition to outlast all 
competitors. Strategies consistent with this idea are 
combative, aggressive, and central to the con 
tinuance of the enterprise. 
• Competitors must live within environmental con 
straints and adapt to environmental changes. Con 
straints on primary and industry resources mean 
that competitors often succeed or fail based on their 
abilities to capture or control scarce resources. Con 
tracts, patents, trademarks, and copyrights are all 
aspects of strategy that capture or control resources. 
Changes or transition periods in environments rep 
resent both problem and opportunity for com 
petitors. Leaders may find that factors which 
produced their superior position now come to 
operate as an anchor. Challengers may find the 
transition period to be a window of opportunity 
where their particular skills now show a better fit 
with market demands (Abell, 1978). 
• Competitors must respect and sustain their en 
vironments. Global sustainable development in 
terms of improved efficiency, stabilized popula 
tion, and restrained consumption offers great prob 
lem and opportunity for competitors 
(Business 
Week, 
May 11, 1992). Japan's efforts are notable. 
Tokyo's Research Institute of Innovative Technol 
ogy for the Earth has a $ 40 million annual budget. 
Japan uses only 50 per cent of the materials and 
energy as the US to produce a unit of GNP. On 
many products, this translates into a 5 per cent cost 
advantage. 
• Competitors in an environment often try to locate 
themselves in an advantageous position or niche. 
The niche should be positioned some distance from 
immediate competitors, with the intent that com 
petition will be diminished. As examples, many 
high-tech companies in Hong Kong, Korea, Singa 
pore, and Taiwan are niched as follows: Hong Kong 
firms tend to specialize in electronic games, 
telephones, and audio appliances; Korea's in 
memory chips, video appliances, and aerospace; 
Singapore's in digital communications, software, 
and biotechnology; and Taiwan's in computer 
peripherals, PCs, and application specific chips 
(Business Week, 
December 7,1992). 
• Older enterprises have unique advantages over 
younger enterprises (Henderson, 1983). Older 
enterprises have learned a great deal about how to 
compete and about how their competitors compete. 
Suppliers and customers in the industry have also 
learned about these companies by reputation and 
by experience. Moreover, suppliers and customers 
are reluctant to alter their knowledge and be 
haviour unless younger enterprises offer strong in 
centives. However, advantages of age and 
experience come at a price. Older enterprises must 
constantly be on the guard against complacency 
and against fixation with their existing product and 
process technologies. 
• Enterprises that are most similar to each other will 
compete most intensively. When one competitor 
has a clear and visible superiority, competition 
from the others will be limited (Henderson, 1983). 
. As an example, when Kmart enters Singapore in 
1994, it will face its stiffest competition not from 
"Mom & Pop" neighbourhood stores but from 
Asian firms already entrenched and already using 
retailing concepts adopted from the US. Kmart is 
entering Southeast Asia partly because it felt no one 
competitor—Sogo, Takashimaya, Yao han, Isetan-
was dominant 
(Asian Wall Street Journal, 
August 17, 
1993).
 
• Competitors that enter a market early generally will 
grow more rapidly and attain larger size than later 
entrants. Typically, market shares of pioneers in an 
industry are some 10 to 20 percentage points higher 
than their largest competitor, depending on the 
industry and its maturity (Robinson and Fornell, 
1985, Robinson, 1988). Reasons for the success of 
early entrants are numerous (Czepiel, 1992). 
Pioneers as compared to late entrants find it easier 
to gain share in the growing market, gain valuable 
experience, and secure channel participation before 
competitors, deter potential competitors from 
entering, set prices to earn profits, and develop 
loyal customers. However, pioneers face greater 
uncertainties in terms of changes in technology and 
greater risks in terms of development costs. 
• Competitors and, less frequently, markets can be 
come extinct. The best defensive strategy is for 
competitors to focus not on the products and ser 
vices they produce but on the needs of its customers 
and the benefits its customers derive from their 
consumption experience. Products and services 
may disappear but needs and benefits will endure. 
• Competitors sometimes avoid competition in cer 
tain tasks and instead cooperate like a school of fish 
Vol. 19, No. 1, January-March 1994 
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or a pack of wolves. Examples here include trade 
associations, research consortia for high-tech in-
novations, ASEAN and SAARC. Care must be 
taken that cooperative efforts stay within legal 
bounds and that efforts enhance—not diminish— 
cooperators' abilities to compete outside the unit. A 
good example here is the surge in trade among the 
nine Pacific Rim nations: China, Hong Kong, In-
donesia, Korea, Malaysia, Philippines, Singapore, 
Taiwan, and Thailand. Trade among these 
countries increased by almost 60 per cent in the 
period 1986 to 1992, growing at a rate nearly twice 
as fast as the group's trade with the US or Japan. 
Because of their rapid growth in intraregional 
trade, the countries suffered less from the recession 
in Japan, US, and European Community 
(Business 
Week, 
May, 1993).
 
As summary, a biological view of competition of-
fers a richness of understanding beyond that of 
economics. Competitors such as countries, companies, 
and products now "come alive" with motives, 
knowledge, skills, and behaviour. Competitors now 
search for resources, capture and consume these resour-
ces, produce products, and produce by-products. Com-
petitors now age, grow, and shrink; they get fat and 
complacent or get "lean and mean." However, despite 
this richness, a biological analogy for competitive 
marketing strategy fails at two fundamental points. 
Biological competition naturally happens while 
strategic competition reflects conscious effort (Hender-
son, 1983). Biological competition cannot readily ac-
count for large changes in strategic competition that 
sometimes must be made rapidly (Czepiel, 1992).