Strategic Positioning of the Firms, Market Competition and Economic Recession in India: A Cross-Sectional Analysis

Abstract

History of business economic cycles suggests that the market economy is subjected to fluctuations and that can be observed and predicted more meaningfully for the understanding of behavioral interactions of economic agents including institutions.Considerable amount of empirical analysis pertaining to firms’ growth, expansion and survival during recession has demonstrated growth potentials of the firms which are ideally synchronized with all the operational areas of the firm’s conducts and performances while focus has been laid down more on production, labor productivity and market share. Our proposed agenda is to examine how strategies have influenced the competition and competitiveness under broad scenario of recession in India nearly for five years and more particularly after the impact of covid-19. The simultaneous equation model is constructed which comprises of structural specifications consistent with the theory by netting the framework that are compatible and coherent. Persistent dynamics produced in the market by consumer, producer and retailer has a long bearing on firms’ behavior both in terms of its strategy and long-term objectives. Although, combinations of strategies adopted during recession reveal both price and non-price competition strategies have been followed aggressively, as per our estimates, cut throat price competition strategies have evolved in complementing the firms’ strategic positioning and market competition.