The Nature of Competitive Rivalry in the Marketplace

Subject: Marketing
Pages: 1
Words: 380
Reading time:
2 min
Study level: College


Strategic networks are companies within an industry with more strategic relationships than companies in the same sector. Competitive competition can exist in product marketplaces, where enterprises compete for economic surplus and customers that sales of goods and services to these customers might provide (Prieto‐Sandoval et al., 2019). The primary purpose of this essay is to discuss the nature of competitive rivalry as well as the strategies, resources, and capabilities that an organization requires to be successful.

Main body

When deciding on a strategy, a company must choose between two types of competitive advantages: differentiating or lower costs than competitors. Lower costs refer to a company’s ability to perform activities differently than competitors, while differentiation refers to performing valuable and different activities (Haapanen et al., 2018). Each strategy’s efficiency and effectiveness are determined by the external environment’s opportunities as well as the weaknesses and strengths of the firm’s internal environment. According to Prieto‐Sandoval and colleagues (2019), a business-level strategy is a fundamental strategy that explains how a company plans to compete in a product market.

Competitive advantage is based on a combination of capabilities, core competencies, and resources. A resource-based perspective demonstrates how a business uses its capabilities and resources to gain a competitive edge and provide higher value to customers. A company’s capabilities are created by combining intangible and tangible assets to distribute, produce, and support the goods and services it offers to customers to create value (Prieto‐Sandoval et al., 2019).

A firm’s business-level strategy may be based on differentiated competitive advantage or cost-competitive advantage, depending on the quality and nature of the firm’s internal environment (Haapanen et al., 2018). Firms seeking a broader market produce value for customers at an industry-wide level, whereas firms wanting a small market segment intend to fulfill the demands of a restricted customer segment.


In conclusion, a firm’s strategic competitiveness is obtained when it successfully implements and establishes a value-creating strategy, which deals with exploiting its core strengths to gain a competitive advantage. A company must examine the four components of lower-cost, distinctiveness, broader or narrow market when deciding on a strategy. Firms must examine their internal and external environments to determine the best option for creating a superior value product for their customers, giving them a higher return than the norm.


Haapanen, L., Hurmelinna-Laukkanen, P., & Hermes, J. (2018). Firm functions and the nature of competitive advantage in internationalizing SMEs. International journal of innovation management, 22(02), 1-24. Web.

Prieto‐Sandoval, V., Jaca, C., Santos, J., Baumgartner, R. J., & Ormazabal, M. (2019). Key strategies, resources, and capabilities for implementing circular economy in industrial small and medium enterprises. Corporate social responsibility and environmental management, 26(6), 1473-1484. Web.