Independent Study--Competitive Strategy Chap 4&5 market signals and competitive moves

There are two different functions of market signals:Truthful signal which indications of a competitor's motives, intentions, or goals. Bluff signal is to mislead other firms to take action or not.
The important forms of market signals include formal communication made by a competitor that either will or will not take action. For example, a firm issue bonds which indirectly indicates that it needs capital. Also,it cause price war. For example, cell phone business use cutting price on their unlimited calling plan. Airlines cutting fares. In addition, test of competitor sentiments. For example, an auto firm announce a new warranty program to see how others will react. Moreover, announcements to avoid costly simultaneous. A firm might announce expansion plans wee in advance. For instance, Apple announced the new facility will start to build. Another function of announcements can be communication with the financial community. For example, improving the reputation of the company by boosting stock price. A firm announces sales figures to misleading the competitors. Competitors discuss their own moves in public.
The fighting brand is also a form of signal. A firm can introduce a brand that has the effect. For example, Safeway has produce its own organic products with different brand names. Target also introduced a new brand called "up&up" products to compete with other competitors.
Market signals can help a firm to build a strong strategic position and have the knowledge about competitors.

Selecting the right competitive move involves finding threatening or non-threatening moves. Offensive and defensive strategies are threatening moves. Offensive strategies involve strategic moves that improve the firm's position relative to that of rival firms in the industry. Defensive strategies are those moves that reduce the ability of rival firm strategies to threaten the firm's competitive strength or organizational resources. Nonthreatening moves--the least risk if such moves can be identified. There are moves that competitors do not even notice or not be concerned about them. For example, Tiffany&Co or Cartier sell high-quality, high-priced jewelry. Target sell low-price jewelry. Therefore, Tiffany&Co or Cartier will not perceive Target as competition at all. It did not threaten their image of quality, nor did it threaten their position with jewelers.