An Alternative Efficient Representation of Demand-Based Competitive Asymmetry

Strategic Management Journal, Volume 28, Issue 7, pages 755–766, 2007

Posted: 11 Jun 2016

See all articles by Wayne S. DeSarbo

Wayne S. DeSarbo

Pennsylvania State University

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: July 2007

Abstract

Competitive asymmetry is defined in terms of the directional level of competition among brands/firms (i.e., unit of analysis), where the degree to which brand/firm A may compete with brand/firm B does not equal the degree to which brand/firm B competes with brand/firm A. Such a market structure phenomenon is quite commonplace in virtually every market, e.g., where there exists distinct market leaders and followers. DeSarbo, Grewal, and Wind recently (2006) proposed a new spatial methodology in SMJ to assess these competitive asymmetries based on information on consumer choice sets (i.e., a demand-based approach). However, the approach espoused by DeSarbo et al. results in as many competitive maps as there are brands/firms in a dataset. In this research, the authors devise a distance-based unfolding multidimensional scaling procedure for deriving joint spaces of brands/firms both as givers and takers of consumer consideration with the objective to have a more efficient representation of competitive asymmetries (i.e., one map irrespective of the number of brands/firms under study). An application is provided for an actual commercial study undertaken by a major U.S. automobile manufacturer examining the mid-size car marketplace. The strategic implications of the results are detailed.

Keywords: competitive market structure, asymmetric competition, multidimensional scaling, positioning, consideration/choice sets

Suggested Citation

DeSarbo, Wayne S. and Grewal, Rajdeep, An Alternative Efficient Representation of Demand-Based Competitive Asymmetry (July 2007). Strategic Management Journal, Volume 28, Issue 7, pages 755–766, 2007, Available at SSRN: https://ssrn.com/abstract=2793493

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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