Which theory emphasizes the need for a firm to consider its competitors when forming its strategy?

Understand the Problem

The question is asking to identify a specific theory from a list of options that focuses on the importance of considering competitors in strategic planning for firms. The key concept here is the relationship between strategy formulation and competitive analysis.

More Information

The Competitive Strategy Theory developed by Michael Porter emphasizes the need for firms to consider their competitors when forming strategies. It provides a framework for analyzing and formulating business strategies that acknowledge the actions and strategies of competitors.

Tips

A common mistake would be confusing resource-based theory with competitive strategy theory, as resource-based theory focuses more on the internal resources of a firm.

Sources

• Competitive Strategy Theory - TheoryHub - open.ncl.ac.uk