"Biological approach" to the classification of competitive strategies (according to the theory of A.Yudanov)

A well-known Russian expert on the theory of competition A.Y. Yudanov emphasizes that since the theory of market competition was born relatively recently, it does not have a generally accepted terminology, and almost every researcher uses his own system of concepts. But the terminology associated with the competition of living organisms is well developed in biology and can be used by economists. Using biological terms developed in the theory of the Soviet biologist L.G. Ramensky, A. Yudanov distinguishes the following main types of competitive strategies: violent (power); pathient (niche); commutant (adaptive); experimental (pioneer).

The violent strategy is typical for firms operating in the field of large business and producing a standardized product. Violent firms have memorable names in the classification of the Swiss scientist X. Friesenwinkel. These are “proud lions”, “mighty elephants” and “clumsy hippos”. Such firms create advantages due to economies of scale and displace competitors from the market. “Lion” is characterized by dynamism, “elephant” – a high degree of stability, and “hippopotamus” – difficulties in management.

A pathile strategy is characteristic of a narrow specialization of the company. Patients shy away from direct competition with leading firms, focusing on consumers who are not satisfied with a standardized product and who are willing to pay for uniqueness. Usually, such highly specialized niches of the market, which do not have a tendency to grow, do not attract giants. Pathients are otherwise called “cunning foxes.” They bring diversity to the market, can coexist for a long time with violents. They look for unmet needs and actively create new ones.

The commutant strategy is typical for small, non-specialized companies. As a rule, they focus on local markets. Commutants are also called “gray mice”. They are distinguished by a high degree of flexibility, use any business opportunities, but do not have significant capacities, special knowledge in business or scientific and technical reserves. “The spirit of free enterprise, with its constant focus on making a profit and its willingness to resort to any means for its sake, is manifested in the activities of commutants in the purest and most complete form. It is the commutant strategy that prevails among the new Russian private firms. Any change in customs duties or comparative profitability of work with different goods generates a massive change in the type of activity of private enterprises” [18 pp.66-67].

An exploratory strategy is concerned with finding revolutionary solutions, creating new markets, or radically transforming old market segments. These firms are called pioneering, “first swallows”, risky firms. In 85 cases out of 100, the sale of new products leads to bankruptcy. But even with the successful implementation of new projects, the company cannot be complacent. It faces new challenges, and there is a need to change the strategy. “It is not without reason that one of the researchers compared the pioneer company with another beast – the “elephant” – a mysterious creature that Winnie the Pooh tried unsuccessfully to catch, and which, when checked, necessarily turned out to be some other animal” [18 p.69]. Explerents play an important role, they stand at the origins of scientific and technological progress.

Given the strategies described above, it can be concluded that modern business is not a “war of all against all”, as one might think. It observes the coexistence and mutual complementarity of companies of different types. The delineation of market niches allows you to avoid hyperconcurrency, to ease competitive pressure by better adapting to certain market segments. This is because firms that have chosen one of the first three strategies cannot successfully combine any other with it. It is not profitable for violents to produce highly specialized products or to work in the specific conditions of local markets. Patients and switchers cannot serve capacious markets. Table 3 shows the main distinguishing features of each strategy.

The author of this classification distinguishes such a concept as the life cycle of the company. These are the stages of growth of the company, during which the competitive strategy can be changed. In biology, a mouse can never turn into a lion or a hippopotamus. But in the economy, a small firm under certain conditions can grow into a large one and change its strategy [2 pp.99-101].

Table 3 Resource requirements by component

Competitive strategies according to A.Yudanov

Source. Yudanov A.Y. Competition: theory and practice: Uchebno-prakticheskoe posobie. – M., 1998, p.82.