Your competitive reputation describes how your competitors regard your company. What is their “mental model” of you, that they will use to predict how you will respond to different situations?
When is it useful?
Acquiring an aggressive competitive reputation can be a valuable tool in competitive strategy. You can win competitive battles without even fighting.
For example, imagine a company that reacts on a hair trigger to any competitive attacks on it’s core market share position, ensuring that when the dust settles it loses no ground. This would lead to greatly reduced profit in the short term, however each time the company would be investing in it’s reputation as a competitor not to be messed with. This reputation is likely to deter any further attacks, leading to much more secure long term profit.
When competitors decide how to react to your new launch or market entry, your reputation, whether of stubborn persistence to hang in there until it succeeds, or as an opportunist who will pull out if you get a bloody nose, will determine their reaction, and thus even the success of the venture. It is a corporate asset to be nurtured and not squandered lightly.
Microsoft is an example of a company with an aggressive competitive reputation, that has caused companies to cooperate with them rather than compete.
How do you do the analysis?
I want to know more
How can you adapt this concept?