Doctoral Dissertations

Date of Award

8-1992

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Major Professor

Ernest R. Cadotte

Committee Members

James H. Foggin, Joseph O. Rentz, Esteban Walker

Abstract

To remain competitive in today's rapidly changing markets, firms must be able to accurately and efficiently assess information on a variety of environmental factors. Yet, little is known about this critical decision-making process.

The purpose of this dissertation was to determine how individuals choose and use information about their competition. An empirically driven approach was used to determine why some individuals are better at this task than others and whether individual and organizational characteristics might enhance or hinder this process. The Strategic Competitor Analysis model served as a framework for this project. The model was designed to approach competitor analysis as a decision making activity.

The study was conducted with a large consumer products firm. The methodology involved a comparison of the firm's channel customers' perceptions of market conditions with the employees' perceptions of market conditions to assess whether some individuals were better at assessing market conditions than others. This was a multi-step process. The first step involved investigating how accurately employees assessed the channel customers' perceptions of differences in performance between key competitors on thirteen customer service factors. The second step involved analyzing how accurately employees assessed the customers' perceptions of importance of the thirteen customer service factors. The final step involved assessing the employees on several individual and organizational characteristics to examine whether any of these characteristics enhanced or hindered the process of competitor analysis.

The findings suggest that there are differences in the abilities of individuals to assess market conditions. Further, these differences may be affected by both individual and organizational characteristics. An individual's ability to accurately assess differences in performance may be affected by his/her cognitive style, level in the organization, and functional responsibility. An individual's ability to understand what is important to customers may be affected by his/her level in the organization, and functional responsibility, as well his/her perception of the organization's reward structure and degree of organizational identity. Finally, as predicted in the psychology literature, at least some individuals employ information processing shortcuts to analyze market conditions.

By examining competitor analysis as a multi-staged decision-making activity, the results of this study suggest that the characteristics which indicate an individual good at understanding differences in performance may not be the same characteristics that indicate an individual good at understanding what is important to customers. A synthesis of the findings lead to several recommendations for organizations. First of all, a team approach to strategic competitor analysis is necessary. Second, everyone in the organization could benefit from additional information on competitive market conditions.

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