Market
commonality are the number of markets in which an organization and its
competitors are jointly involved. There is a degree of important to each of the
individual markets to each of the competitors. The organizations that are in
competition with one another in various markets are involved in multi-market
competition.  Resource similarity is how
similar the organization tangible and intangible resources are to a
competitor’s. This is in both categories of types and amount. When an
organization have indistinguishable types, and amounts of resources they are
more likely to have these same similarities when it comes to strengths and
weakness and strategies. It means to say that these concepts are the building
blocks for a competitor analysis because it is the first step that an organization
takes to create a theory about its competitors’ actions and responses.

First
you need to understand why the firm take these actions. A firm takes
competitive actions for one of two things. The first thing is to defend or build
its competitive advantages their actions. The second thing is to improve its
market position. The type of competitive actions is strategic or tactical. The factors
that affect the likelihood that a firm will take competitive action are first
mover incentives, size, and quality.  First movers are a firm that takes an initial
competitive action in order to build or defend its competitive advantages or to
improve its market position. First movers usually can achieve loyalty of
customers that become committed to the companies’ services and goods. Small
firms are usually the first to launch a variety of competitive actions. Large
firms only launch competitive actions and strategic actions at a certain time
period. Quality forms when the expectations of the customers’ needs are meet or
exceed by the company’s goods or services.  

The
factors that affect the likelihood a firm will initiate a competitive response
to the action taken by a competitor are the type of competitive action, reputation
and market dependence.  Depending on the
type of competitive action that is the type of response that will be received.
For example, if a strategic action is received than a strategic response will
be given.  Reputation is a important
factor because this lets the firm know whether or not they should take action
or response. It is based on the rival past behavior. Market dependence indicates
the degree to which a firm’s incomes or benefits are determined from a specific
market.