Understanding competitive advantage in the general hospital industry: evaluating strategic competencies

This study examines the drivers of competitive advantage within the hospital industry. Specifically, we examine both the direct and joint effects of market structure, firm‐level competencies, and interorganizational relationships on organizational performance. The results of this approach indicated that managers, through their strategic actions related to the capabilities and relationships they develop and deploy, can establish advantageous competitive positions and influence the negative effects of market structure by developing important strategic competencies. Copyright © 2003 John Wiley & Sons, Ltd.     

Detecting the relationship between competitive intensity and firm product line length: Evidence from the worldwide mobile phone industry

The way firms lengthen or shorten their product line with respect to rivals is regarded as one of the possible strategies firms can pursue to respond to competition. This article builds and tests hypotheses to study the effect of different levels of competitive intensity on product line length. The empirical analysis of data on 3,527 handset models introduced by 66 mobile phone vendors from 1994 to 2010 shows a consistent inverse U‐shaped relationship between competitive intensity and the firm's product line length. In this way, we pinpoint an interesting link between the product line extension literature and the competitive dynamics and competitive intensity perspectives. Copyright © 2013 John Wiley & Sons, Ltd     

Strategy and industry effects on profitability: evidence from Greece

The present study examines the impact of firm and industry‐specific factors on profitability, using census data on Greek manufacturing. At the firm level, particular attention is given to strategy effects. Based on a modification of Porter's typology, these effects are captured through different forms of both ‘pure’ and ‘hybrid’ strategies. Industry effects are represented using industry concentration, entry barriers, and growth. Hypotheses are developed taking into account both previous research and the particular idiosyncrasies of the national context. The results obtained provide important insights on specific determinants of firm profitability. With respect to strategy, results confirm the hypothesis that hybrid strategies are clearly preferable compared to pure ones. In addition, it was found that the more generic strategy dimensions are included in the strategy mix, the more profitable the strategy is, provided that one of the key ingredients is low cost. Industry‐level effects, although weaker, show strong impact of industry entry barriers. Moreover, the findings suggest that while both sets of factors significantly contribute to firm profitability, firm‐specific factors explain more than twice as much profit variability as industry factors. Copyright © 2003 John Wiley & Sons, Ltd.     

Bridging inter- and intra-firm boundaries: management of supplier involvement in automobile product development

Outsourcing has become an important strategy for many firms. Yet, firms need to compete with their competitors who also outsource and may share the same suppliers. This article explores how a firm could outperform others in managing the division of labor with a supplier in product development. Drawing on the empirical data collected from the Japanese auto industry, this paper shows that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance. Overall, the results imply that outsourcing does not work effectively without extensive internal effort. Copyright © 2001 John Wiley & Sons, Ltd.     

The impact of alternative operationalizations of industry structural elements on measures of performance for entrepreneurial manufacturing ventures

Using a sample of 115 manufacturing ventures, this study examined elements of industry structure which prior theory and research in the fields of industrial organization economics, strategic management, and entrepreneurship suggest are the most important structural characteristics of industries. Future researchers should carefully select the particular operationalization of industry structure as our research demonstrates that the influence of industry structural elements on measures of firm performance is strongly dependent upon the particular operationalization utilized. In addition, measures of industry structure were found to have a differential impact on alternative measures of firm performance, suggesting that different performance measures are not interchangeable proxies for one another. © 1998 John Wiley & Sons, Ltd.     

Defining and developing competence: A strategic process paradigm

In this paper, competence is defined in operational terms as the degree to which the firm or its subunits can reliably meet or exceed objectives. Two antecedents to competence (and thus competitive advantage) are then developed and defined. These are the ‘comprehension’ of the management team working on developing competence and the ‘deftness’ of their task execution. Empirical results from a study of 160 new initiatives in 40 organizations from 16 countries suggest that: (1) it is feasible to operationalize and measure these constructs; (2) comprehension and deftness are important correlates of an organization's degree of competence as defined; and (3) a process-centered paradigm for understanding competence development shows promise.     

Letting the market work for you: an evolutionary perspective on product strategy

Managers must choose to allocate scarce resources either to the maintenance of a range of products tailored to heterogeneous consumer preferences or to the efficient production of a small number of products. In addition, managers must choose the degree to which they periodically cull the product line. Vigorous selection removes poor performers from the product line, but this action simultaneously impairs the firm's ability to monitor changes in consumer preferences. Empirical evidence from the computer workstation industry reveals that the ideal choice of product variety depends on the competitive ecology of the industry. Product variety becomes less valuable as the total number of products on the market increases, but it increases in value as uncertainty makes the accurate prediction of demand difficult. Copyright © 2000 John Wiley & Sons, Ltd.     

Strategic factor markets,scale free resources,and economic performance: The impact of product market rivalry

This paper analyzes how scale free resources, which can be acquired by multiple firms simultaneously and deployed against one another in product market competition, will be priced in strategic factor markets, and what the consequences are for the acquiring firms' performance. Based on a game‐theoretic model, it shows how the impact of strategic factor markets on economic profits is influenced by product market rivalry, preexisting competitive (dis)advantages, and the interaction of acquired resources with those preexisting asymmetries. New insights include the result that resource suppliers will aim at (and largely succeed in) setting resource prices so that the acquiring firms earn negative strategic factor market profits—sacrificing some of their preexisting market power rents—by acquiring resources that they know to be overpriced. Copyright © 2014 John Wiley & Sons, Ltd.     

Hidden but in plain sight: The role of scale adjustment in industry dynamics

While much is understood about the general pattern of industry dynamics, a critical element underlying these dynamics, the rate of the expansion of individual firms, has been largely overlooked. We argue that the rate at which firms can reliably increase their scale of operations is a critical factor in understanding the structure of industries. Further, success at scaling‐up the firm's operations provides a dynamic‐isolating mechanism that insulates established firms from new competition. We show that the bases of profitability in the industry (monopoly‐like profits stemming from the restriction of output, efficiency rents based on firm‐specific productivity differences, or transitory Schumpeterian profits) can be traced to the scale adjustment process. We explore these issues in a computational model of industry dynamics. Copyright © 2013 John Wiley & Sons, Ltd.     

An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource‐based perspective

In this study we revisit some fundamental questions that are increasingly at the heart of current strategic management discourse regarding the relative impact of industry and firm‐specific factors on sustainable competitive advantage. We explore this issue by referring to respective assertions of two major perspectives that dominate the literature over the last two decades: the Porter framework of competitive strategy and the more recent resource‐based view of the firm. A composite model is proposed which elaborates upon both perspectives' divergent causal logic with respect to the conditions relevant for firm success. Empirical findings suggest that industry and firm specific effects are both important but explain different dimensions of performance. Where industry forces influence market performance and profitability, firm assets act upon accomplishments in the market arena (i.e., market performance), and via the latter, to profitability. The paper concludes with directions for future research that will seek to integrate both content and process aspects of firm behavior. Copyright © 2001 John Wiley & Sons, Ltd.     

Business unit relatedness and performance: A look at the pulp and paper industry

Discussions of relatedness in the strategy literature concentrate on linkages among business units in terms of key business functions such as marketing and production. While much is known about relatedness from the standpoint of corporate diversification, evidence about the relationship between relatedness and performance at the business unit level has been notably lacking. To further our understanding of the benefits and costs of relatedness, this study examined the perspectives of business unit managers to assess: (1) how the relationship between the two primary types of relatedness–production and marketing–are emphasized at the business unit level, and (2) how these types of relatedness affect business unit performance.     

Learning process in new product development teams and effects on product success: A socio-cognitive perspective

The study purports to develop and empirically test a model of team learning process and its effects on team performance in new product development teams. Using the socio-cognitive theory of learning in groups and organizations, several hypotheses were tested to show that the primer components of social cognition (that is, information acquisition, information dissemination, information implementation, unlearning, thinking, intelligence, improvisation, sense-making, and memory) form an interactive process model of the team learning phenomenon. By studying 165 new product development projects, it was shown: (i) that the eight primer socio-cognitive factors of information acquisition, information dissemination, information implementation, memory, thinking, improvisation, unlearning, and sense-making constitute interrelated sub-components of a higher-order team information-processing construct; (ii) that team intelligence is positively related to components of team information-processing; and (iii) that information-processing facilitates new product success primarily through the positive effects of superior information implementation. Theoretical and managerial implications of the study findings are discussed.     

A theory of global strategic alliances: The case of the global auto industry

The theory articulated in this paper suggests that the desire to reduce demand and competitive uncertainty are two separate, important motives for alliance formation. Taking this as a starting point, we predict the configuration of horizontal alliances that we might expect to observe within an industry when firms experience these uncertainties to different degrees. An empirical test of this theory using data from the global auto industry yields results consistent with the view (1) that alliances are a device for reducing both the uncertainties that arise from unpredictable demand conditions and those that arise from competitive interdependence, and (2) that variation of demand uncertainty and competitive uncertainty across firms explains differentials in both the intensity and structure of their horizontal alliance activity.     

产业集聚间分工和地区竞争优势——来自长三角微观数据的实证

产业集聚间分工是区域竞争优势的主要源泉。本文基于长三角地级市企业数据,在产业和空间两个层面上用E-G指数测算了长三角二位数产业的集聚程度、三位数产业集聚间的分工状态以及与此相关的区域溢出效应,从中揭示了产业集聚间分工对整合离散的产业集聚,形成长三角地区竞争优势的内在机理。研究结果显示,产业集聚间的分工通过三个步骤锁定地区竞争优势:①产业集聚内企业的跨区域发展使价值链在空间上的分布趋于离散化,进而导致次级产业集聚间分工的形成,并产生了产业间的溢出效应;②随着分工的深化和趋于稳定,地区专业化水平进一步获得提升;③在区域溢出效应的作用下,原有产业集聚被锁定在区域溢出效应明显的区域,形成广域的产业集聚。以上过程的累积循环形成了该地区的竞争优势。     

Losing by winning: The danger zone of adverse competitor replacement

Research Summary: We use a formal model, motivated by a case study from the airline industry, to consider an industry structure wherein a firm may find that improving its competitiveness hurts its performance. Specifically, we examine the possibility that a superior incumbent may, by getting stronger, drive a weak rival from the market, and thereby allow a stronger rival to enter in its place. Such “adverse competitor replacement” reduces the profit of the superior incumbent and may even, in an extreme case, cause the superior incumbent to be driven from the market as well. We show that adverse competitor replacement can arise under a rational equilibrium and may become more likely if a firm improves its capability for self‐improvement. Managerial Summary: Managers are consistently advised to improve the competitiveness of their firms and beat the competition. We examine the possibility that beating out the competition may have adverse consequences. Specifically, a strong incumbent may, by getting stronger, outcompete a weaker rival to such an extent that the weaker rival exits the market, thereby creating an open market niche for a stronger rival to enter, in effect, a form of adverse competitor replacement. Competing with this stronger rival may in turn reduce the strong incumbent's profits below what they had been before driving the weak rival out. We illustrate adverse competitor replacement with a case study from the airline industry and discuss implications for a firm's investment in its own competitiveness.     

New product introductions below aspirations,slack and R&D alliances: A behavioral perspective

We develop hypotheses based on behavioral theory that explain how high technology firms' new product introduction (NPI) performance below aspiration levels impact the number of R&D alliances, and how slack moderates this relationship. Using panel data of U.S. biopharmaceutical firms, we find that as firms' NPI performance below historical aspiration levels increases the number of R&D alliances they form increases and slack intensifies this relationship. We contribute to alliance research by providing theory and empirical evidence that increases in the distance of NPI below aspirations serve as a motivation for increases in R&D alliances, and empirically to behavioral theory by revealing that NPI goals act similarly to financial performance goals in their impact on firms' actions and slack intensifies this relationship. Copyright © 2015 John Wiley & Sons, Ltd.     

Development and return on execution of product innovation capabilities: The role of organizational structure

This paper conceptualizes and tests an integrated model that combines the dual-core and ambidextrous models of product innovation. The integrated model distinguishes the development and return on execution of radical and incremental product innovation capabilities. The authors argue that organizational structure plays an important dual role as an (a) antecedent to the development of radical and incremental product innovation capabilities and (b) as a moderator in determining the new product performance returns from executing such capabilities. Using a sample of high-tech firms, the study finds that organizational structure is more consistent in predicting the execution of product innovation capabilities into new product performance than in predicting the development of such capabilities. For example, the effect of radical product innovation capability on new product performance is negative but nonsignificant under a formal structure, while the same effect is positive under an informal structure. Conversely, the effect of incremental product innovation capability on new product performance is positive under a formal structure, while the same effect is negative under an informal structure. The implications for managing different types of product innovation capabilities under formal versus informal structures and their effects on new product performance are discussed.     

Exploring the concept of coopetition: A typology for the strategic moves of the Finnish forest industry

The Finnish forest industry is sustainable, well-established, internationally oriented and successful. For companies in such a basic industry, an industry that features mainly bulk products and relatively small domestic markets, sustainability in business may hinge on long-term strategic choices. It is proposed in this paper that it is not only strong domestic competition, but also—and especially—coopetition traditions (simultaneous cooperation and coopetition) that are the crucial factors contributing to the success of the industry. This article contributes to the literature by providing industry-level tools, namely a coopetition framework and combined coopetition typology. The findings indicate that coopetition traditions have been present throughout the activities of the Finnish forest industry, enabling sustainability of the industry to a significant extent. Managerial and theoretical implications are also discussed.     

The R&D and marketing cooperation across new product development stages: An empirical study of Taiwan's IT industry

This study extends the new product development (NPD) process research to a new environmental context (Taiwan's IT industry) and a new business type (original design manufacturing, ODM). Taiwan's IT industry has achieved a very outstanding performance during the last two decades. The island's experience is quite valuable for those emerging countries that are struggling to transform themselves from producing low-value goods to making high-technology products. After analyzing the data collected from 153 research and development (R&D) and marketing managers in Taiwanese IT firms, this study finds that the higher the perceived importance of R&D-marketing cooperation is, the higher the attained level of R&D-marketing cooperation will be. Consequently, a better NPD performance can be achieved. This study additionally reports that a firm that has adopted a Defender innovation strategy attains a lower level of R&D-marketing cooperation, and has a poorer NPD performance than those firms that adopted either Prospector or Analyzer innovation strategies. Finally, environmental uncertainty has no significant impacts on the perceived importance and the attained level of R&D-marketing cooperation.     

Governance mode vs. governance fit: Performance implications of make‐or‐ally choices for product innovation in the worldwide aircraft industry, 1942–2000

We examine the impact of governance mode and governance fit on performance in make‐or‐ally decisions. We argue that while horizontal collaboration and autonomous governance have direct and countervailing performance implications, the alignment of make‐or‐ally choices with the focal firm's resource endowment and the activity's resource requirements leads to better performance. Data on the aircraft industry show that relative to aircraft developed autonomously, collaborative aircraft exhibit greater sales but require longer time‐to‐market. However, governance fit increases unit sales and reduces time‐to‐market. We contribute to the alliance and economic organization literatures. Copyright © 2013 John Wiley & Sons, Ltd.