Introduction

This study sets out to measure the dynamics of the competitive process. It focuses on the performance of firm populations by analysing the components of firm turnover that affect the nature and the effectiveness of change within industries.

The dynamics of change within industries are complex. Firms are born and they die. Young firms mature, old ones decline. Growth and decline take place simultaneously in infants, adolescents, mature adults, and the elderly. Changes in size and efficacy occur both in individual units and in groups of firms. Family groups disband and are reconstituted as the result of mergers and control changes.

This study examines each of these components in detail. Both the magnitude and the effect of change on industry performance are measured. Each of the components is examined individually, and then the reinforcing effect of the various forces when taken together is calculated.

The research demonstrates that competition is a dynamic process, with various subcomponents, each of whose contribution is modest but meaningful. When taken together, they significantly change the industrial landscape. This change occurs gradually. It is rarely momentous. But it accumulates steadily to change the nature of an industry over relatively short periods.

Conceptual approaches to competition

Words in common usage tend to take on a variety of meanings. “Competition” is no exception. Although many nuances are attached to the term, most writers tend to view competition as either a process or a state of affairs.