Goce Andrevski
Associate Professor & Distinguished Research & Teaching Fellow of Strategy
- Adapted from: “From protection to adjustment: How rival repositioning alters competitive action repertoires”
- Based on Research by: Goudarzi, K., Ahmadi, A. and Andrevski, G.
- Journal: Journal of Business
Key Takeaways
- Moderate rival convergence triggers a protection mode — firms respond by increasing the volume and variety of competitive actions to defend their eroding position.
- Extreme rival convergence triggers an adjustment mode — escalation becomes counterproductive, so firms simplify their repertoires and shift from defence to strategic adaptation.
- Intensity and complexity follow an inverted U-shape, while nonconformity follows a U-shape: firms first conform to industry norms, then deliberately diverge to carve out fresh competitive space.
- Repertoire adaptations in response to convergence carry positive performance consequences — knowing when to fight and when to adapt is a source of competitive advantage.
Every firm occupies a distinctive position in the competitive landscape — a unique market stance that underpins its competitive advantages. But that position is constantly under pressure. As rivals reposition toward a firm, their distinctiveness erodes, blurring the competitive boundary and triggering a strategic response. Yet prior research has told us surprisingly little about how the full breadth of a firm's competitive behaviour — its entire action repertoire — shifts in response to this repositioning pressure.
This study addresses that gap by introducing the Protection–Adjustment Framework, which identifies two distinct response modes firms adopt depending on how intensely rivals are converging toward them. The framework is tested on a comprehensive longitudinal dataset of publicly traded U.S. firms from 2001 to 2022, tracking competitive actions across seven categories — new product introductions, pricing, marketing, acquisitions, joint ventures, alliances, and market expansions — sourced from Ravenpack News Analytics.
The key driver is rival positioning convergence: measured by how closely rivals' business descriptions (from their 10-K filings) have come to resemble the focal firm's own description over the prior year. This measure captures the aggregate erosion of a firm's market distinctiveness as all its rivals reposition simultaneously.
The research challenges a common assumption in competitive strategy: that more aggressive firms always win. The data show that at extreme convergence levels, sustained aggression becomes self-defeating. Firms that cling to high intensity and complexity face mounting imitation costs, coordination burdens, and diminishing returns. The firms that thrive recalibrate — simplifying their actions and pursuing more distinctive, nonconforming moves that rivals cannot easily copy.
The Protection–Adjustment Framework offers managers a practical lens for reading competitive pressure and calibrating responses. Rather than simply tracking individual rival actions, leaders should monitor aggregate rival convergence — the degree to which rivals as a whole are moving into their competitive space. This broader signal tells them not just whether to escalate, but when to pull back.
For boards and strategists, the implication is clear: competitive advantage is not just about how many actions a firm takes or how diverse they are, but about knowing when to fight and when to adapt. A repertoire perspective — one that considers the volume, variety, and distinctiveness of competitive moves together — offers a more complete and actionable guide to competitive positioning than any single action metric alone.