Dynamic strategic groups: deriving spatial evolutionary paths

Recent theoretical developments in the domain of strategic groups, specifically those related to cognitive groups and strategic group identity, seem to suggest that strategic group membership is likely to be relatively stable over time and that firms in a strategic group co‐evolve. Yet appropriate data analytic approaches that use information about firms over time to identify stable strategic groups and their evolutionary paths have been lacking. To overcome such limitations, this research proposes a new clusterwise bilinear multidimensional scaling model that can simultaneously identify (1) the number of strategic groups, (2) the dimensions on which the strategic groups are based, and (3) the evolution of the strategy of these groups over time. Our discussion encompasses various alternative model specifications, together with model selection heuristics based on statistical information criteria. An illustration of the proposed methodology using data pertaining to strategic variables for a sample of public banks in the tristate area of New York, Ohio, and Pennsylvania across three time periods (1995, 1999, and 2003) identifies two underlying dimensions with five strategic groups that display very different evolutionary paths over time. Post hoc analysis shows pronounced differences in firm performance across the five derived strategic groups. This article concludes with a discussion of the implications of the findings, as well as potential future research directions. John Wiley & Sons, Ltd. Copyright © 2009 John Wiley & Sons, Ltd.     

A Process model of strategic business exit: Implications for an evolutionary perspective on strategy

The process model of strategic business exit (SBE) maps the activities of different levels of management onto the business and corporate levels of strategy making involved in Intel Corporation's exit from its core dynamic random access memory (DRAM) business. The SBE process model contributes to the development of an evolutionary process theory of strategy making by conceptualizing the pattern of managerial activities through which resources and corporate competencies are internally redirected toward more viable business opportunities, and the strategic context of a core business dissolves. The SBE process model corroborates the usefulness of the Bower-Burgelman process model for conceptualizing strategy making in complex organizations.     

A capabilities‐based perspective on target selection in acquisitions

We develop a capabilities‐based theory of acquirer target selection, arguing that acquirers will pursue both low capability targets in existing contexts to deploy existing capabilities, and high capability targets in new contexts to acquire new capabilities. These arguments are formalized in an analytical model that jointly considers the benefits and costs of acquisition as a function of target capability level and context. The predictions from this model are tested in the Chinese brewing industry (1998–2007), with results showing that acquirers strongly prefer inferior targets in existing geographic markets, but are relatively more likely to choose superior targets in new markets, especially if they have strong acquisition capabilities. Our study provides insight into the factors driving target selection, and contributes to a capabilities‐based understanding of acquisitions. Copyright © 2015 John Wiley & Sons, Ltd.     

Competitive positioning within and across a strategic group structure: the performance of core,secondary, and solitary firms

Drawing from economic and cognitive theories, researchers have argued that firms within an industry tend to cluster together, following similar strategies. Their positioning in strategic groups, in turn, is argued to influence firm actions and firm performance. We extend this research to examine performance implications of competitive positioning not just among but also within groups. We find that performance differences within groups are significantly larger than across groups, suggesting that some firms within groups develop better resource or competitive positions. We also find that secondary firms within a group outperform both core firms within the group and solitary firms, the latter being those not belonging to any multifirm strategic group. This suggests that secondary firms may be able to effectively balance the benefits of strategic distinctiveness with institutional pressures for similarity. We conclude that the primary implication of strategic groups does not relate to the ability of firms to create stable, advantageous market segments through collusion. Instead, strategic groups represent a range of viable strategic positions firms may stake out and use as reference points. Moreover, our results concerning secondary firms indicate that firm positioning within a group structure can have performance implications. Copyright © 2002 John Wiley & Sons, Ltd.     

Communication and attention dynamics: An attention‐based view of strategic change

Research Summary : The attention‐based view (ABV) has highlighted the role of organizational attention in strategic decision making and adaptation. The tendency to view communication channels as “pipes and prisms” for information processing has, however, limited its ability to address strategic change. We propose a broader role for communication as a process by which actors can attend to and engage with organizational and environmental issues and initiatives and argue that such a view can significantly advance understanding of strategic change. On this basis, we offer suggestions for future research on communication practices, vocabularies, rhetorical tactics, and talk and text in shaping organizational attention in strategic change. We also maintain that this enhanced view of the ABV can help advance research on dynamic capabilities, strategy processes, strategy‐as‐practice, and behavioral strategy. Managerial Summary : To further enhance our capabilities to manage strategic change and renewal processes in organizations, we need a better understanding of how to manage organizational attention. In this article, we highlight the importance of understanding the role of communication and discuss the use of different communication practices, vocabularies, rhetorical tactics, and talk and text as possible levers that can be used to dynamically shape organizational attention. We call for further research to advance the understanding of how these levers can be used to influence the ways in which different sets of strategic issues, initiatives, and action alternatives are handled. We believe that such an enhanced view of organizational attention can enable the development of new, improved strategy practices to manage strategic change and renewal processes.     

Dynamic capabilities and the emergence of intraindustry differential firm performance: insights from a simulation study

This paper explores how the dynamic capabilities of firms may be linked to differential firm performance within an industry. A formal model is presented in which dynamic capabilities are treated as a set of routines guiding the evolution of a firm's resource configuration. The model centers on the endogenous choice firms make between resource deployment through imitation and experimentation in order to generate alternative resource configurations. Three performance‐relevant attributes of dynamic capabilities are proposed: timing, cost, and learning of resource deployment. Theoretical propositions are developed that suggest how these attributes contribute to the emergence of differential intraindustry firm performance. Simulation analysis offers insights into the trajectories of evolutionary change engendered by dynamic capability, and serves to refine the theoretical propositions. It is found that timing, cost, and learning effects foster the emergence of robust performance differences among firms with strikingly similar dynamic capabilities. Moreover, the results show that even small initial differences among firms can generate significant intraindustry differential firm performance, especially when the effects of timing, cost and learning are combined. Copyright © 2002 John Wiley & Sons, Ltd.     

Business model innovation in strategic alliances: a multi‐layer perspective

Business model innovation (BMI) has recently become a topic of interest for research as well as corporate practice. However, we lack specific insights into actors, drivers, and different forms of BMI as the concept is by now mainly addressed in a very general way. In this paper, we analyze how BMI takes place in strategic alliances with the focus of enhancing the recent knowledge about BMI by developing a concept that links firm‐level BMI with alliance‐driven innovation of business models. Against the background of an in‐depth explorative qualitative study, we shed light on the basic nature business model innovation alliances (BMIA) and their effects on both, alliance level and firm level. We develop a process model of BMIA that is the first model providing a holistic picture of this particular type of BMI. Our findings allow for deep insights into BMI processes in incumbent companies and uncover in detail the importance of boundary spanning activities in this realm. By providing these insights, we pave the ground for a new stream of BMI research that focuses on the in‐depth understanding of the role of collaboration and network effects in recent BMI processes. In addition, we show practical benefits for partners in BMI alliances. These insights may help to overcome the traditional fear of negative effects that is still very often prevalent in companies when it comes to issues of partnering with firm external players in strategic issues.     

Rivalry within strategic groups and consequences for performance: the firm‐size effects

Our study examines how, in a given industry, rivalry functions within strategic groups defined according to the size of their member firms and how this rivalry affects performance. We hypothesize that, owing to several forms of group‐level effects including market power, efficiency, differentiation, and multimarket contact, strategic groups that comprise smaller firms will exhibit both increased rivalry and decreased performance compared with strategic groups that comprise larger firms. We test our hypotheses by estimating the effect of group‐level strategic interactions (i.e., conjectural variations) on firm performance. Ultimately, our analysis of empirical data on loans in the Spanish banking industry demonstrates that increased rivalry and decreased performance indeed characterizes firms belonging to a strategic group that comprises smaller firms. Copyright © 2011 John Wiley & Sons, Ltd.     

Balancing vertical integration and strategic outsourcing: effects on product portfolio,product success,and firm performance

Most prior research has focused on vertical integration or strategic outsourcing in isolation to examine their effects on important performance outcomes. In contrast, we focus on the simultaneous pursuit of vertical integration and strategic outsourcing. Our baseline proposition is that balancing vertical integration and strategic outsourcing in the pursuit of taper integration enriches a firm's product portfolio and product success, and in turn contributes to competitive advantage and thus to overall firm performance. We derive a set of detailed hypotheses, and test them on a unique and fine‐grained panel of longitudinal data documenting over 3,500 product introductions in the global microcomputer industry. The results provide strong support for the notion that carefully balancing vertical integration and strategic outsourcing when organizing for innovation helps firms to achieve superior performance. Copyright © 2006 John Wiley & Sons, Ltd.     

Growing pains: Pre‐entry experience and the challenge of transition to incumbency

We examine how entrepreneurial entry by diversifying and de novo firms in new industries leads to different levels of performance. We propose that these types of firms differ in dynamic capabilities, which help them overcome growth impediments and transition to incumbency in the industry. Growth impediments arise at larger size, older tenure levels in industry, and after technological discontinuities. Because of their prior experience, diversifying firms are better equipped to handle the challenges of impediments to growth. Meanwhile, de novo firms, ostensibly tailor‐made for the targeted industry, are more likely to stumble over these growth challenges, and eventually lag behind diversifying firms. We find support for our hypotheses using a near census of firms in the U.S. wireless telecommunications industry over the 1983–2004 period. Copyright © 2011 John Wiley & Sons, Ltd.     

A demand‐based perspective on sustainable competitive advantage

We develop an approach to analyzing the sustainability of competitive advantage that emphasizes demand‐side factors. We extend the added‐value approach to business strategy by introducing an explicit treatment of how firms create value for consumers. This allows us to characterize how consumer heterogeneity and marginal utility from performance improvements on the demand side interact with resource heterogeneity and improving technologies on the supply side. Using this approach, we address a variety of questions including whether technology substitutions will be permanent or transitory; the sequence in which new technologies attack different market segments; how rents from different types of resources change over time; whether decreasing marginal utility and imitation give rise to similar rent profiles; the extent of synergies within a firm's resource portfolio; the emergence of new generic strategies; and the conditions that support strategic diversity in a market. Our focus on consumer utility and value creation complements the traditional focus in the strategy literature on competition and value capture. Copyright © 2006 John Wiley & Sons, Ltd.     

How dynamic can organizational capabilities be? Towards a dual‐process model of capability dynamization

The recent discussion in the field of strategic management broadly favors the idea of dynamic capabilities in order to overcome potential rigidities of organizational capability building. The major question addressed in this paper is whether capabilities can actually be conceived as being in flux—and if so, to what extent and in which way? After briefly recapitulating the distinguishing features of organizational capabilities, path dependency, structural inertia, and commitment are identified as the main capability‐rigidity drivers causing a managerial dilemma. In the search for a resolution of this dilemma different approaches of dynamic capabilities are identified and discussed. The analysis shows that the approaches suffer from inherent conceptual contradictions: the dynamization runs the risk of dissolving the original idea and strength of organizational capability building. Ultimately, capabilities would lose the strategic power attributed to them in the resource‐based view. The last section of this paper therefore aims to develop an alternative approach, which aims at preserving the original merits of organizational capability and solving the rigidity issue not by integrating a dynamic dimension into the capability construct but rather by establishing a separate function (‘capability monitoring’). The suggestions mount up to a tier solution. Its logic builds on the dynamics of countervailing processes and second‐level observation. Copyright © 2007 John Wiley & Sons, Ltd.     

Competition in Grocery Retailing: The Impact of a New Strategic Group on BLS Price Increases

Metropolitan areas with a significant presence of warehouse stores had lower retail food price increases during 1977 to 1992 than did areas with no warehouse stores. The negative impact occurred largely during the first half of the 15-year period. Strategic learning appears to have led to a different response from incumbent supermarkets during 1985–1992. Change in prices was positively related to change in concentration and negatively related to entry.     

基于改进遗传算法的模具零件孔群加工路径优化

为提高孔群模具的加工效率,提出了一种最近邻、遗传算法和禁忌搜索相融合的改进遗传算法。采用最近邻算法选取一系列好的初始种群,同时将禁忌搜索中"禁忌"的思想引入到遗传算法中,并在进化过程中随机引入部分新个体,进行迭代搜索。根据孔群加工特点建立了类似旅行商问题的数学模型,并用改进算法求解最短加工路径,在分布复杂的孔类模具上进行数值实验。轮胎实例应用结果表明,改进算法优化后路径长度比CAM系统算法优化后路径长度缩短5.31%,比X向路径法缩短77.88%,比Y向路径法缩短77.63%,比最近邻算法缩短4.52%;当实验参数相同时,改进算法路径长度比遗传算法缩短14.65%,且运行时间平均缩短了63.60%。改进算法的路径长度明显缩短,有效提高了孔群的数控加工效率。其通用性较好,在提升数控系统孔群加工效率方面具有参考价值。     

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to ‘shocks’ in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms. Copyright © 2002 John Wiley & Sons, Ltd.     

When are technologies disruptive? a demand‐based view of the emergence of competition

By identifying the possibility that technologies with inferior performance can displace established incumbents, the notion of disruptive technologies, pioneered by Christensen (1997), has had a profound effect on the way in which scholars and managers approach technology competition. While the phenomenon of disruptive technologies has been well documented, the underlying theoretical drivers of technology disruption are less well understood. This article identifies the demand conditions that enable disruptive dynamics. By examining how consumers evaluate technology and how this evaluation changes as performance improves, it offers new theoretical insight into the impact of the structure of the demand environment on competitive dynamics. Two new constructs—preference overlap and preference symmetry—are introduced to characterize the relationships among the preferences of different market segments. The article presents a formal model that examines how these relationships lead to the emergence of different competitive regimes. The model is analyzed using computer simulation. The theory and model results hold implications for understanding the dynamics of disruptive technologies and suggest new indicators for assessing disruptive threats. Copyright © 2002 John Wiley & Sons, Ltd.     

Business model innovation and competitive imitation: The case of sponsor‐based business models

This paper provides the first formal model of business model innovation. Our analysis focuses on sponsor‐based business model innovations where a firm monetizes its product through sponsors rather than setting prices to its customer base. We analyze strategic interactions between an innovative entrant and an incumbent where the incumbent may imitate the entrant's business model innovation once it is revealed. The results suggest that an entrant needs to strategically choose whether to reveal its innovation by competing through the new business model, or conceal it by adopting a traditional business model. We also show that the value of business model innovation may be so substantial that an incumbent may prefer to compete in a duopoly rather than to remain a monopolist. Copyright © 2012 John Wiley & Sons, Ltd.     

基于自适应遗传算法的一类非线性规划问题的新算法

传统的方法解答非线性规划问题存在着有进入局部最优、效率低、甚至根本得不出结果的局限性,而遗传算法中用不变的p_c和p_m来控制进化,很容易导致早熟,降低算法搜索效率。根据适应度自动对交叉概率p_c和变异概率p_m进行调整,提出一种新的遗传算法。通过对6个测试函数的仿真实验,结果表明本算法是非常有效的。     

The impact of strategic dissent on organizational outcomes: A meta‐analytic integration

Research summary: Strategic dissent represents divergence in ideas, preferences, and beliefs related to ideal and/or future strategic emphasis. Conventional wisdom in strategic management holds that such differences in managerial cognitions lead to higher‐quality strategic decisions, and thus to enhanced firm performance. However, 4 decades of empirical research have not provided consistent findings or clear insights into the effects of strategic dissent. Hence, we analyze the relative validity of predictions about these effects from both social psychological theories of group behavior and information processing perspectives on decision‐making. Then, we conduct a meta‐analytic path analysis (MASEM) based on current empirical evidence. Synthesizing data from 78 articles, we put to rest the notion that strategic dissent leads to positive outcomes for organizations and estimate how negative its effects actually are. Managerial summary: Top management teams (TMTs) set the tone and direction for their firms in important ways. Top managers, however, often disagree over fundamental issues related to strategy. Such strategic dissent affects how important decisions are made, and thus how the firm performs. In more specific terms and contrary to popular belief, strategic dissent creates not only dysfunctional relationships among top managers, but also disrupts the process by which these managers exchange, discuss, and integrate information and ideas in making strategic decisions. In short, firms have not yet generated value through numerous perspectives, ideas, and opinions among their top managers. We discuss interventions that could prove helpful in efforts to benefit from having diverse cognitions in a TMT.     

Pricing process as a capability: a resource‐based perspective

Strategists following the resource‐based view argue that firms can generate rents through value creation. To create value, firms develop and use resources and capabilities that other firms cannot imitate, trade for, or substitute other assets for. Even a firm that has created value, however, may not capture the potential rents associated with that value. To capture rents, a firm must set the right prices for what it sells. Most views of pricing assume that a firm can readily set appropriate prices. In contrast, we argue that pricing is a capability. To develop the ability to set the right prices, a firm must invest in resources and routines. We base our argument on a study of the pricing process of a large Midwestern manufacturing firm. We show that pricing resources, routines, and skills may help or inhibit a firm in setting the right price—and hence in appropriating value created. Our view of pricing as a capability contributes to the resource‐based view because it suggests that strategists should consider the portfolio of value creation and value appropriation capabilities a firm uses to create competitive advantage. Our view also contributes to economics because it suggests that strategic decisions about pricing capabilities have important implications for a fundamental economic action, determining prices. Managers in firms without effective pricing processes may be unable to set prices that reflect the wishes of its customers, so the customers may misuse their resources. As a result, resources may be used ineffectively. Our view of pricing as a capability therefore takes the resource‐based‐view straight to the heart of what is perhaps the central economic question: the best use of resources. Copyright © 2003 John Wiley & Sons, Ltd.