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THE PROCESS OF FIRM COMPETITION IN BUSINESS MARKETS
In this paper we explore competition as a firm process, rather than as a background economic variable. We contribute by refining firm competition as a process of goal seeking within a context of many actors. First we consider past research on structural and socially constructed competition. We develop a research framework inside relational time, based on the priority of a firm’s line of action, the direction of a firm’s activities, whether primarily towards the customer or first focusing on the activities of another firm. We explore the theoretical distinctions between non-competitive, competitive and rivalry firm activity through an analysis of exporters and importers of fine wine to Denmark from South Australia. We distinguish firm competition from other more complex interactions in a network context. We conclude with managerial implications and the opportunities for future research. The concept of competition in the business-to-business literature shifts meaning depending on the context. The meaning seems to extend along a continuum from rivalry (Porac, Thomas, Wilson, Paton & Kanfer 1995) to coopetition (Bengtsson & Kock 2000). According to McNulty (1968, 639) “There is probably no concept in all of economics that is at once more fundamental and pervasive, yet less satisfactorily developed, than the concept of competition.” In the business-to-business literature competition is defined as structural, where firms seek the same customer or goal (Macdonald & Ryall 2004), or competition is regarded as socially constructed (Porac et al. 1995). Competition is also considered as an interaction process undertaken over time between firms (cf Easton & Araujo 1994; Turnbull, Ford & Cunningham 1996). We pursue only an understanding of the competition process based on a single firm’s activities. Our approach is to focus on this simple form and develop a process based framework to understand competition. We see this as a single step, the first advance towards a framework for analyzing cooperation and competition together (Jarillo 1988).
