Blind Spots in Industry and Competitor Analysis: The Implications of Interfirm (Mis)perceptions for Strategic Decisions

This article bridges the literatures on competitor analysis and strategic decision making by (1) introducing the notion of competitive decision making into the strategic decision-making literature and (2) embedding this notion into a framework of industry and competitor analysis. The article shows that decision makers typically have specific "blind spots" when they consider the contingent decisions of competitors. The article identifies these blind spots and discusses how theymay explain persistent, commonly observed phenomena such as industry overcapacity, new business entry failures, and acquisition premiums.