eThesis - School of Business electronic theses

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This thesis reviews the research on multimarket competition and competitive dynamics, and contributes to the literature by examining how competition can be modeled in the global game consoles market between Microsoft Xbox 360 and Sony PlayStation 3.

The empirical study is conducted by collecting data with the method of structured content analysis. The data is analyzed with quantitative methods. Specifically, I suggest that the visual statistical method of Chernoff faces can be used to help to counter some of the statistical issues related to data analysis.

This thesis includes a theoretical contribution in the form of a conceptual framework of competitive behavior between a rival multinational firm dyad. Additionally the thesis addresses the methodology of competitive dynamic modeling.

The empirical case suggests that the two game console manufacturers Sony and Microsoft compete with each other aggressively, concentrating especially on service and signalling actions. Although the first mover Microsoft has been more aggressive, Sony has been gaining on in sales volume, and the market is currently quite equally shared between the two companies.

The future of the two game console giants depends on how well they can keep up with the forces of creative destruction in their hypercompetitive environment. The managers in the multinational firms should consider the competitive dynamics with their main competitors closely in order to ensure the success of the firms in the long term.