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Anticipating Recations Essay

The last few years has experienced a great increase in the attention given to the United States in the study of speculative actions in business by forecasting and reacting to competitive market conditions. Particularly, conditions that dictate actions, is true of efforts to predict the ebb and flow of market activities.  Commonly recognized in all business cycles as seeking the competitive edge, indeed, has become the popular interest in this problem that the term “action reaction and forecasting” has come to mean specifically the  reaction to a competitors action in the degree of business activity.

By tradition, and indeed commonly by explicit proviso, the motivation of the business professional is vested formally in the company share holders, employees and the community. This approach is particularly useful in understanding positions taken (not to mention the added pressure) and recognizing important insights of the competitor in the market place and the speed by which one can and should respond.  “Often it is enough for the business to know accurately what are the existing conditions and trends.” (Haney, p1)

The nature of the actor, action, and affected rival actions provide insight to the method by which the competitor will respond. Analyzing the behavioral patterns of

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rivals focuses on motives, operational procedures, methodology and market conditions management performs. The dynamic environment is tacitly influenced by these conditions in any given market.

The more complex actions are stronger indicators of response and reaction time than less complex action. Hence the Nature of the Action supports the less complex actions, clearly indicating the elicited quicker responses than more complex actions.  It is important to note the complexity of actions because most actions are “standard,” and not simply adaptable to given situations.  Therefore there is a greater tendency to “respond to actions or stimuli that evoke standard responses and procedures.” (S. Venkatarman) It is also apparent that the response and the speed of second response action is in direct relation to the nature of the competitor and the nature of the actor.

Key competitive actions aggressively dictate the finite time span of attention managers.  These conditions cause the managers to attend only to mission critical issues while ignoring others.  Thus visibility or complexity of an action is important as time and attention are resources that are in constant flux.  Without overstating the fact that the greater probability of market focus span consistently falls to the action designed for the impact and attention.  Even with analytical software to assist, it can only be employed in complex situations while active managers haven’t time to employ them.  Results from such actions on market behavior are still dubious.

Slack availability, as phrased, describes one of the two significant characteristics of organizations, performance offers the incentive to respond to multiple actions from the competition. This position drives the reactive skill to the competitors first and follows up action. Even with time and attention acting as pressure to the responsive action, the ability to change standards operating procedures, organizational actions and reactions is tantamount to an initial action.

In seeking conclusive action, it is important to remember that the central objective is to indentify the various combinations of the nature of actions.  Also included in this assessment are the actors and competitors that contain the highest probability or even the lowest indicator of response.  Timing is also a critical component once the other facts have been derived.

The second best predictor of competitor response under the Nature of Rivals after the price and non-price dichotomy is the ability to respond. As represented by the size of the affected rivals.  The central component of one’s problem depends on his rivals’ reactions to the current rate of success based on the actions in place.  The greater question being is how, when and where will the competitor respond.

Now taking into account those possible responses, actions must be tailored in response to original actions. Clearly any action taken will have different results and impact on the profitability margin and market share of the original companies’ initial action.

A given example is marked by the unique intensely competitive environment of the airline industry.  The varied number of diverse rivals in combination asserts the nature of the action and the actor at work in concert.  With regards to the quickest to the slowest to the weakest and strongest constantly shifting and exchanging position, a central question regarding certain characteristics of the acting firm response in predicting the action is directly related to the nature of the actor.

Hence size of the actor is a significant factor in predicting reaction, i.e. time, magnitude, direction and intended affect. It is indicated here that larger actors, particularly from other large actors are more likely to attract responses.

Conclusion

Specifically, we can infer that a major company’s action will be met with a quick response from rivals.  A lucid understanding of the present is a condition requisite to a unambiguous look into the future. Unclear ideas about current conditions greatly obscure the outlook. Behavioral pathology delves into the characteristics of managements mind set as any player should pay close attention to large rivals as well as the reverse.  Data confirms that actions are much more likely to be responded by other sizable organizations rather than by smaller firms, hence the greater reaction by the larger the firm.  However, it should be noted that not all companies will or are able to respond rapidly even though size is offers that option.

Its’ been suggested in responding to pricing moves, that ignoring the such action is a safe decision in the competitive market by smaller firms rather than large organizations.  The logic behind such a decision is seen as high profile.  The low profile action is less likely to elicit an over reactive response from a very large rival, i.e. wake the sleeping giant.  In any case, it can expected that at least one competitor will react and execute some sort of response.  The aggregate analysis indicates that the lower profile non-price action has a greater market impact on the smaller competitor’s rather then larger rivals in the market place.

Skill in reactive analysis does not necessarily mean the right decisions have been made by any actor. The art and skill of taking advantage of advance information is not always given to the one who is able acquire such information.

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