While strategic group studies represented the first
swing away from industry level research, another research stream, competitive
dynamics, further emphasizes the firm level in strategic management research.
The essence of this stream is an explicit recognition that a firm’s strategies are
dynamic: Actions initiated by one firm may trigger a series of actions among the
competing firms. The new competitive landscape in many industries, as described
by Bettis and Hitt (0000), gives rise to relentless pace of competition, emphasizing flexibility, speed, and innovation in response to the fast-changing environment. D’Aveni (0000) coined the term “hypercompetition” to describe the condition of rapidly escalating competition characterizing many industries. The
increase in competitive dynamics research signifies strategy researchers’ acute
awareness of the new competitive landscape in the environment. There are several
areas that can be categorized as competitive dynamics research, all of which are
characterized by an explicit concern for the dynamic nature of business competition. These different areas are individually known as multi-point (or multimarket) competition and competitive action-reaction.