Final answer:
Locally-owned cafes in a small town are likely to respond more quickly to each other's actions due to the monopolistic competition market structure and their strong community ties. They may not react with the same urgency to the strategic moves of a Burger King franchise which operates on a larger scale and is seen as less of a direct, immediate threat.
Step-by-step explanation:
The question discusses the tendency of locally-owned, one-location cafes to respond to each other's tactical actions more readily than to strategic actions by a newly arrived Burger King franchise. This behavior is rooted in the monopolistic competition market structure, where local cafes, being smaller and more nimble, can quickly adapt and counter moves made by their direct competitors. As illustrated by the theory of McDonaldization, local businesses are gradually being replaced by uniform, chain entities, leading to less diversity in available services and products. Small businesses, deeply integrated with their communities, have a swift communication flow, enabling them to collaborate or compete effectively amongst themselves. However, this interconnectedness may not extend to larger franchises, whose strategic actions are often dictated by corporate policy and not immediate competitive pressures. Local cafes might not feel the need to respond as aggressively to a Burger King, which is seen as an outsider and operates on a different scale.
Competition dynamics in small towns also relate to situation factors and geographic advantages. Over time, centrally-located businesses attract more customers and can outgrow competitors in less favorable locations. Still, direct competition encourages businesses to adjust their strategies to maintain customer share—tactical responses like introducing new products or special promotions are common practices amongst these smaller players. Interestingly, when there is a disruptive change, such as the introduction of a chain franchise, these local businesses may experience a shift in competitive landscape that could affect their market position.