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Explain the difference between proactive.docx

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York University
Administrative Studies
ADMS 3930

Explain the difference between proactive-ness and competitive aggressiveness in terms of achieving and sustaining competitive advantage. 1. Proactive-ness o A forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand. o Firm’s efforts to seize new opportunities o Monitor trends, identify future needs of existing customers, and anticipate changes In demand or emerging problems that can lead to new venture opportunities o Involves recognizing changes and acting on those insights ahead of the competition o First mover advantage—the benefit gained by firms that are the first to enter new markets, establish brand identity, implement administrative techniques, or adopt new operating technologies in an industry  Advantages:  Capture unusually high profits because there are no competitors to drive prices down  Establish and retain brand image and hold on to the market share gains they earned by being first  Generally have benefits that can be sustained until firms enter the maturity phase of an industry  Not always successful:  Customers may be reluctant to accept new ways of doing things 2. Competitive aggressiveness o An intense effort to outperform industry rivals characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace. o Firm’s efforts to outperform its industry rivals o Companies with an aggressive orientation are willing to “do battle” with competitors—slash prices and sacrifice profitability to gain market share or spend aggressively to obtain manufacturing capacity 3. Risk taking o Making decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward. o Firm’s willingness to seize a venture opportunity, even though it does not know whether the venture will be successful—
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