Study On Internal Structure Of Industry Affect Competitive Reaction Behavior

This paper discusses the internal construct factor of the industry which affect the enterprise competition reaction behavior, it has been minimally explored to competitive interaction domain. The study come from the analysis to pricing model of China steel industry, the price is not only a factor which affect directly the rate of profit, but also a factor which reflect directly the market competition and adjust market behavior. Theoretically, the paper firstly points out the strategic group can be used as a proxy for the homophily construct only under two terms. One is the strategic group really exist in the industry, and another is the strategic group construct be the concept of industry organization to affect the enterprise of the competitive interaction behavior. Secondly, the paper proposes there are some enterprises having similar base strategy, but still having own strategy, (namely secondary firms). These firms represent the heterophily between enterprises. Then the strategic group, and core firms , secondary firms in strategic group form industry internal construct, we can explain the competitive behavior not only from homophily represent by strategic group, but also from heterophily represent by the enterprises strategic position in strategic group. In empirical study, the paper makes the main enterprises action and reaction index in steel industry based on the data from Jan of 2001 to Dec of 2004 of www.mysteel.com and www. steelinfo.com.cn, which are trade website in steel industry. Analysis from more than 500 actions and 2000 reactions, we verify hypothesis by statistical method. First, under the different market structure environment, the impact of industry internal construct to enterprises competitive reaction behavior is different. The study result will help the enterprises to make out reasonable strategic decision, further adjust and optimize industry construct. Secondly, the paper thinks that the reaction dissymmetry is a widespread phenomenon in the competitive interaction, Because the enterprise is different from the strategic variable, such as resources and product/ market etc.. We can analyze the dissymmetry by consciousness and motive of top leader, more directly, we also can analyze its by the result of competitive reactions. To enterprises, the study of dissymmetry can help them to understand and analyze the rivals attitude to own competitive action. From the theories and empirical analyses, we have following results: The enterprises in different strategic group, their competitive behaviors are different; the enterprises having different strategic position, their competitive behaviors are different too; the dissymmetry be in rivals; the strategic construct can reflect the degree of dissymmetry; under different market structure, the competitive behaviors are different. These results provide some standpoints which the enterprises should referenced in the course of competitive interaction. At the same time, the study method such as content analysis and behavior analysis can use for reference to manager's strategy decision in real world.