WHEN COMPETITORS MATTER?

Abstract

This review paper focuses to define broadly when the
companies pay attention to their competitors from the logic of multimarket
strategy theory. The theory assumes that firms usually intentionally enters to
rivals market to decrease the rivalry. According to Mutual Forbearance logic,
when competitors are operating in several markets simultaneously, it reduces the
intensive competition, so one rival attack in one market might cause to be
attacked by that firm in another market. So due to that firms usually have less
motivation in hostile actions and enters each other’s market by creating
multimarket contact. Also, this paper emphasizes that the multimarket strategy
usually causes not intentional strategies of the firms, also due to the chance of
multimarket contacts (MMC). This research distinguishes the notions of naïve
MMC and purposive MMC depending on competitor awareness