In the Model of Competitive Dynamics, Exhibit 8.4 in the textbook, motivation and capability to respond is one of the reasons companies launch competitive challenges. The Toyota Prius offer set off the competitive dynamic cycle for more fuel-efficient automobiles.

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Underlying all of these reasons is a desire to strengthen financial outcomes, capture some of the extraordinary profits that industry leaders enjoy, and grow the business. Some companies are also motivated to launch competitive challenges because they want to build their reputation for innovativeness or efficiency. For example, the Toyota success with the Prius signaled to its competitors the potential value of high-fuel-economy cars, and these firms have responded with their own hybrids, electric cars, high-efficiency diesel engines, and even more fuel-efficient traditional gasoline engines. This is indicative of the competitive dynamic cycle.