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Competitive Pressure Systems Mapping and Managing Multimarket Contact

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This is an MIT Sloan Management Review article. All organizations sense competitive pressure intuitively, but most, says the author, do not do a good job of managing it. That is, in part, because it is often difficult to see the overall pressure system--a complex, shifting pattern of overlapping contacts among rivals that continually alters the climate of an industry. Illustrates how pressure systems can be mapped and controlled to a significant extent. A map based on measured pressures has important implications for an organization's market and competitor selection, growth plans, product portfolio and diversification strategy, resource allocation priorities, competitive-intelligence system, merger and acquisition strategy, and scenario-planning process. In any industry, companies can develop competitive strategies by using a pressure map to answer two critical questions: If the current pressure pattern continues, what position will my company ultimately hold? How can my company stabilize or shift the direction of pressure to reduce (or enhance) the predicted impact of the current pressure system? Through detailed discussion of different industries, the author demonstrates how pressure maps can reveal the underlying competitive dynamics of an industry. He then offers a variety of mechanisms by which organizations can and do affect their competitive landscapes.
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