Session 222

Challenging Traditional Notions of Competitive Strategies and Competitive Advantage

Track E

Date: Monday, October 12, 2009

 

Time: 17:15 – 18:30

Common Ground

Room: Meeting Room 7


Facilitator:
Ken Smith, University of Rhode Island

Title: Porter's Generic Strategies Under Uncertainty: A Formal Rationalization

Authors

  • Roland Bel, Kedge Business School

Abstract: Following the resource-based theory, we view the firm as a collection of strategic assets. In presence of uncertainty and incomplete contracts, firms must ‘control’ their strategic assets to protect ex-ante investments. We define control over an asset as enforceable access: A firm controls an asset if it can access it and no other firm can exclude the firm from using it. To avoid loosing control on its assets, a firm will have the choice between three strategies: (i) Increasing the marginal productivity of its assets; (ii) Decreasing the possibilities of substitution between its assets and other external assets; (iii) Decreasing the number of firms to which it is likely to be exposed. We rationalize Porter’s generic strategies but with a twist. And if we show that there are no other possible strategies, we argue, against Porter, that efficient hybrid strategies are possible.

Title: Strategic Formulation in a Fragmented and Declining Industry: A Look at the U.S. Homebuilding Space

Authors

  • Richard Brown, Penn State University

Abstract: A view of industrial structure can help scholars gauge the overall level of uncertainty in a particular space. In industries where the market is both fragmented and in decline, uncertainty abounds. This study explores the U.S. Homebuilding Industry within the context of uncertainty and strategic implications. Taking a manipulated version of the HHI, I propose a new tool labeled the Concentration Continuum which puts the degree of consolidation in perspective better than the binary label of “Fragmented” versus “Consolidated.” Additionally, I posit that most of the leading firms in the industry are at risk of an insolvency event by calculating the Altman Z-Score of the leading firms. The interaction of fragmentation and decline are cause for concern in relation to strategic implications for relevant firms.

Title: The Challenge of Disruptive Strategy for Established Firms

Authors

  • Pierre Roy, University of Montpellier

Abstract: This paper explores a new stream in the strategic management field, namely the way some firms manage to change the competitive rules of the game in their industry (i.e. a disruptive strategy). Our contribution lies in studying the specific case of established firms and the challenges they encounter when implementing a disruptive strategy in their industry. The study of the introduction of multiplex-type theatre in the French motion pictures industry helps understanding the strategic issues at stake. Tackled with a method triangulation, our case study provides results about the causes of the disruption, as well as key success factors within the process and implications for firms’ performance and competitive dynamics

Title: Uncertainty in Positioning Strategy: Choose Distance when Categorical Identities are in Flux, Swiss Banks (1936-2002)

Authors

  • Fabiana Visentin, University of Lugano
  • Filippo Carlo Wezel, emlyon
  • Alessandro Lomi, University of Lugano

Abstract: Positioning strategy is one of the major sources of uncertainty that companies face. Recent studies recognized the need to compromise between the ‘stay away from others’ –to avoid competition- and the ‘stay close to them’ – to gain legitimation. But differentiation and similarity to competitors make sense only with reference to evaluation categories. This paper addresses the performance consequences of firm-level similarity over the course of category institutionalization. Using data on Swiss banks (1936-2002), our main hypotheses posit (i) the existence of an inverted U-shaped relationship between organizational differentiation and growth rate and (ii) the amplification of such an effect in presence of sharp categorical distinctiveness –i.e., the more distinct the focal category, the stronger the inverted-U shaped effect.

Title: Varieties of Behavior: A Philosophical Examination into the Types of Competitive Actions

Authors

  • Tomi Nokelainen, Åbo Akademi University

Abstract: Prior typologies of competitive actions have not been rigorously theoretically derived and therefore have failed to address the question of what competitive actions, theoretically speaking, are there available for companies to choose from in their effort to enhance and defend their competitive position. This proposal builds upon the philosophical theory of action and demonstrates – with an empirical illustration – that there are exactly eight logically possible types of context-invariant competitive actions six of which are absent from all prior typologies of competitive actions. The discussion suggests that this proposed typology may be complemented with another theoretical premise, such as the resource-based view of the firm – or some other appropriate representation of the firm – to capture the full essence of competitive behavior.

Title: What is Competitive Advantage and How Do You Know When You Have it?

Authors

  • Nicola McCarthy, Georgia Institute of Technology
  • Frank T. Rothaermel, Georgia Institute of Technology

Abstract: We provide herein an analysis of definitions of competitive advantage from the canon of literature and identify contention between these definitions on the questions of measurement. Initially we use Compustat data for 4,909 firms from the U.S. manufacturing sector from 1980 to 2007 to assess the validity of different proxies for competitive advantage. We also apply different statistical techniques to assess the volatility of performance metrics over time.

All Sessions in Track E...

Sun: 10:00 – 11:30
Session 256: Discipline Based Theories: What Do Theories of the Firm Say About Organizational Dynamics
Sun: 13:00 – 14:30
Session 257: Applying Theories: What Does Strategy & Organization Say About Health Care?
Sun: 15:00 – 16:30
Session 258: Integrating Theories of Problem Formation
Sun: 16:30 – 17:30
Session 309: Competitive Strategy, IG Meeting
Mon: 12:45 – 14:00
Session 159: Strategic Factor Markets: Antecedents, Consequences and Dynamics
Session 166: Competitive Strategy and the Business of Science
Mon: 15:45 – 17:00
Session 160: Emerging Strategies in Acquisition
Session 220: Contemporary Challenges to Organization Theory
Mon: 17:15 – 18:30
Session 157: Managerial Cognition and Dynamic Capabilities at the Crossroads: Current Issues and Novel Strands of Development
Session 222: Challenging Traditional Notions of Competitive Strategies and Competitive Advantage
Tue: 10:00 – 11:15
Session 161: Demand-based Approaches to Strategy: The Role of Customers and Communities
Session 163: Resources and Capabilities to Strengthen Alliance Formation and Execution
Tue: 11:30 – 12:45
Session 164: Competitive Strategy and Firm Performance
Session 165: Emerging Organizational Solutions for Exploration Strategies
Tue: 14:30 – 15:45
Session 158: Strategic Change and Dynamic Capabilities
Session 169: Unpacking Sources of Heterogeneity: Market Frictions, Firm Resources, Strategic Actions
Wed: 10:00 – 11:15
Session 216: Industry Evolution and Resource Architecture
Session 217: Designing Organizations to Sustain Performance
Wed: 11:30 – 12:45
Session 214: Managerial Capabilities and the Microfoundations of Strategy


Strategic Management Society

Washington DC