Firms' Strategic Positioning Modeling in Dynamic Strategy Space Agent-Based Approach

Firms' Strategic Positioning Modeling in Dynamic Strategy Space Agent-Based Approach

Morteza Mahmoudzadeh (Islamic Azad University – Tabriz, Iran), Mohammad Ali Sobhanallahi (Kharazmi University – Tehran, Iran) and Seyed Siavash Jahan Morad Nouri (Al-Ghadir Non-Profit Institution of Higher Education, Iran)
DOI: 10.4018/978-1-5225-4056-4.ch016

Abstract

The aim of this research is firms' strategic positioning modeling in a dynamic strategy space consisting of the customers and competitors. Presented model provides the possibility of choosing superior position to other competitors and customers for each firm, so that it can maximize its profit and market share. According to this that the best position choice can have different meanings for different companies in an industry, so the studied firms were divided into six groups based on a series of the obtained indicators of experts in the cosmetics-sanitary industry in Iran and two scenarios were tested for the superior position choice (closing to the best firm, locating in the best position) on them. Finally, the appropriate approach was offered for firms in each group in choosing the superior position by using the simulation results agent-based approach.
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Literature Review

Competitive strategy had been the main core of success in various industries in strategic management for continuous decades (Hitt et al., 1996). Many researchers emphasize that the competitive strategy is not a static phenomenon, but is a sequence of interconnected actions and reactions that occur over time (Galbraith & Schendel, 1983). De Obeso Orendain and Wood (2010) investigate strategies for complex, dynamic problem solving in a fire-fighting microworld. They developed a cognitive model with the aim of providing insight into the development and selection of strategies participants use. Kodama (2010) suggested a framework for building a dynamic strategic management theory is “change process management.” Changes comprise those in the external environment and the internal corporate system, and dynamic congruence of corporate boundaries is the first proposition of these process changes. Najmaei (2011) proposes an analytical archetype based on Dynamic capabilities theory (DCT) in order to show theoretically how a dynamic approach to innovate business models provides executives and researchers a handful of insights into the realm of value innovation in the current challenging landscape. Hadjis and Papageorgiou (2012) examine the use of the system dynamics approach to capture the market evolution structure. They developed a holistic model of market evolution involving the most important components of the business environment problem situation such as the buying process, product life cycle characteristics, Customer Satisfaction and plausible Marketing Strategies. Prezenskin and et al. (2017) applied the method of cognitive modeling on a complex rule-based category learning task to gain a better understanding of the underlying processes of dynamic decision-making in strategy formation.

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