ANALYSIS OF THE EFFECTS OF TASK ENVIRONMENT AND FIRM’S MARKET POWER ON COMPETITIVE POSITION OF BRAZILIAN FIRMS

ANÁLISE DOS EFEITOS DO AMBIENTE DE OPERAÇÕES E DO PODER DE MERCADO DA FIRMA NA POSIÇÃO COMPETITIVA DE FIRMAS BRASILEIRAS

ABSTRACT

Purpose:

The study aims to analyze the effects that task environment and firm’s market power exerts on Brazilian firm’s competitive position, during the period of 2012 to 2017, which encompasses the effects of the 2008 crisis.

Design/methodology/approach:

We used Partial Least Squares path modeling when estimating the effects of competitive environment and market power on a firm’s competitive position, considering the effects of time. The size of firm was used as a weighting factor. The sample is comprised by manufacturing industry Brazilian publicly traded firms, active in the period 2012 to 2017.

Findings:

The capacity of firms to achieve and sustain a favorable competitive position is directly dependent on the degree of market power they own. Under a reactive managerial point of view, managers should make strategic choices that allow the firm to stay close to consumers, to maintain and reinforce market power, avoiding reductions in market share. Under a proactive managerial point of view, managers should take advantage of market power by building barriers that would make it difficult for competitors to have access to consumers.

Originality/value:

This research brings two original contributions. The first one is the identification of the determining factors of the competitive position of Brazilian firms, during the period after the 2008 financial crisis. The second one is the proposition and test of a structural equations model to estimate the effects of market power and task environment on firm’s competitive position.

Keywords:
Task environment; Market power; Competitive position; 2008 financial crisis