Showing papers on "Competitive advantage published in 1987"

Strategic Management: Concepts and Cases

Abstract: Part 1 Concepts and techniques of strategic management: the strategic management process - an overview the three strategy-making tasks -developing a strategic vision setting objectives, and crafting a strategy industry and competitive analysis evaluating company resources and competitive capabilities strategy and competitive advantage matching strategy to a company's situation strategy and competitive advantage in diversified companies evaluating the strategies of diversified companies implementing strategy - building resource capabilities and structuring the organization implementing strategy - budgets, policies, best practices, support, systems, and rewards implementing strategy - culture and leadership. Part 2 Cases in strategic management.

Strategic groups, asymmetrical mobility barriers and contestability

Abstract: This paper examines the literature on strategic groups and extends it: first, by clarifying the distinction between two alternate approaches to forming groups, emphasizing that multivariate group analysis can be used to conserve information not only summarize it as bivariate grouping does; second, by focusing attention on the importance of asymmetrical mobility barriers and competitive advantage in the process of industry consolidation and concentration; and third, by linking groups and the concept of contestability in an effort to make some progress towards explaining the evolution of industry structure.

Competitive strategy under uncertainty

Abstract: Competitive strategy under uncertainty involves a trade-off between acting early and acting later after the uncertainty is resolved, and another trade-off between focusing resources on one scenario and spreading resources on several scenarios, thus maintaining flexibility. This paper analyzes both these trade-offs taking into consideration the nature of uncertainty, industry economics, intensity of competition, and the position of a firm relative to its competitors.

SBU Strategies, Corporate-SBU Relations, and SBU Effectiveness in Strategy Implementation

Abstract: In a departure from earlier studies focusing only on the effects of corporate strategies, this study examined the effects of strategic business units' (SBUs') strategies on the utility of various states of corporate-SBU relations. For SBUs trying to build market share or to pursue differentiation as a competitive strategy, openness in corporate-SBU relations and subjectivity in performance assessment were found to be positively associated with effectiveness; for SBUs trying lo maximize short-term earnings or to pursue low cost as a competitive strategy, the corresponding associations were found to be negative. In contrast, corporate-SBU decentralization emerged as positively associated with SBUs' effectiveness irrespective of their strategic contexts; although SBUs' competitive strategies moderated the magnitude of that association, their strategic missions did not.

Technological Pioneering and Competitive Advantage: The Birth of the VCR Industry:

Abstract: This article examines a significant example of "technological pioneering"-the development of an emerging technology in pursuit of future comercial opportunity. In this case, the pioneer's efforts resulted in the birth of a major industry, the manufacture of videocassette recorders for the mass consumer market. The authors compare the actions of six firms that were pioneers in the development of this technology-two in the U.S. and four in Japan. Three firms-all Japanese-emerged in the late 1970s as the big winners in the growth of this new industry. However, this is not another case in which international differences in "competitiveness" were decisive. The real success story lies in the management practices of three pioneers, who just happened to be Japanese.

Decision support systems: the next decade

Abstract: Peter G.W. Keen is executive director of the International Center for Information Technologies (ICIT). Dr. Keen has been an advisor to the senior mangement of multinational corporations, airlines, petrochemical and financial service firms in Europe, North and South America and Asia. He has also advised governments and government agencies in several countries. As an educator, Dr. Keen served on the faculties of Harvard Business School, Massachusetts Institute of Technology and Stanford University and he was a visiting professor at Wharton School of Business and the London Business School. Peter Keen is the author of Competing In Time: Using Telecommunications for Competitive Advantage and Decision Support Systems: An Organizational Perspective. He has published extensively in journals such as Barrons, Datamation, MIS Quarterly, Management Science and Office: Technology and People. In addition, Dr. Keen has appeared in a number of television programs on office automation and telecommunications. His research and practice have focussed on the links between technology, business management and organizational health; on the critical policy decisions senior management must addess to exploit the business opportunities of information technologies, Peter Keen received his undergraduate degree from Oxford University. His masters and doctoral degrees are from Harvard University.

The learning curve, diffusion, and competitive strategy

Abstract: This paper explores the implications of the learning curve for competitive strategy under a range of assumptions regarding competition and the nature of the learning process. A game-theoretic model is used to examine how the learning rate and information diffusion affect entry barriers, profits, and price dynamics.

Innovation Through Intrapreneuring

Abstract: The United States needs to increase its speed and cost-effectiveness in innovation; but most large companies are inefficient in turning new technologies into profitable businesses (commercialization), cost reductions, new features, and competitive advantages. They fail to identify, support, and exploit the intrapreneurs. Firms must learn to manage intrapreneurs. Intrapreneurs must be distinguished from promoters. Intrapreneurs have visions and the ability (actions) to turn ideas into marketplace successes; they search for the market for their innovation. People can succeed as intrapreneurs if they: (1) do anything to move their idea forward, (2) ask for forgiveness rather than for permission, (3) come to work each day willing to be fired, and (4) work underground as long as possible. Firms must find intrapreneurs to trust, and give them the resources and personnel needed. They must give intrapreneurs the skills they need as well as role models. They can be hired initially or raided, and suggestions on hiring are offered. Researchers must be kept close to model shops and pilot plants. Flexibility in work roles and knowledge sharing across organizational units is needed. (TNM)

Commercializing Technology Through New Business Incubators

Abstract: Considers the new business incubator as a means of leveraging resources to develop new companies. The new business incubator - otherwise known as the innovation center, among other names - has been evolving since the late 1970s to give new firms, especially high-technology and manufacturing firms, structure and credibility. As a company's innovative management system, the incubator's director, board of directors, advisory council, and consultant network provide knowledge and enthusiasm, improved efficiency, and the perception of success, among other things. These resources, and more specific assistance related to facilities support, administrative assistance and business expertise, give the company a competitive edge. A national survey of new business incubators was administered in July-August of 1985, followed up by onsite analysis and in-depth interviews with incubator managers and directors in the United States. According to the data from the 50 respondents, management and marketing are the two most important functions of incubators. Firms that participate in an incubator are almost twice as likely to succeed than fail. Four incubator models are discussed: university-related, private, community, and corporate/franchise. At the time of the survey, approximately 170 incubators have been established in the U.S., with more under development in countries such as Japan, China, France, England and Germany. Conclusions show that while the incubator concept is still in the experimental stages, its usefulness in leveraging resources, encouraging development, and promoting cross-institutional networking will ensure its continued growth. (CJC)

The Strategic Advantages of the Factory of the Future

Abstract: In spite of the significant potential competitive advantages of the automated manufacturing technologies generally known as "the factory of the future, "American managers have been hesitant to adopt them. This article reviews a number of applications of such technologies and describes how they were successfully applied to achieve competitive advantage. It then reviews the types of technologies included in the concept of the factory of the future and identifies the costs, benefits, and problems associated with them. The author then outlines the implications of these technologies for business strategy.

Ideology and National Competitiveness: An Analysis of Nine Countries

Abstract: Ideology and National Competitiveness shows how and why ideology affects the power, role, and behavior of managers in nine countries: Japan, the United States, Taiwan, Korea, Germany, France, the United Kingdom, Brazil, and Mexico. Effective managers must understand the ideological implications of their actions to gain competitive advantage. A research colloquium book.

Innovation Through Intrapreneuring

Abstract: The United States needs to increase its speed and cost-effectiveness in innovation; but most large companies are inefficient in turning new technologies into profitable businesses (commercialization), cost reductions, new features, and competitive advantages. They fail to identify, support, and exploit the intrapreneurs. Firms must learn to manage intrapreneurs. Intrapreneurs must be distinguished from promoters. Intrapreneurs have visions and the ability (actions) to turn ideas into marketplace successes; they search for the market for their innovation. People can succeed as intrapreneurs if they: (1) do anything to move their idea forward, (2) ask for forgiveness rather than for permission, (3) come to work each day willing to be fired, and (4) work underground as long as possible. Firms must find intrapreneurs to trust, and give them the resources and personnel needed. They must give intrapreneurs the skills they need as well as role models. They can be hired initially or raided, and suggestions on hiring are offered. Researchers must be kept close to model shops and pilot plants. Flexibility in work roles and knowledge sharing across organizational units is needed. (TNM)

Commercializing Technology Through New Business Incubators

Abstract: Considers the new business incubator as a means of leveraging resources to develop new companies. The new business incubator - otherwise known as the innovation center, among other names - has been evolving since the late 1970s to give new firms, especially high-technology and manufacturing firms, structure and credibility. As a company's innovative management system, the incubator's director, board of directors, advisory council, and consultant network provide knowledge and enthusiasm, improved efficiency, and the perception of success, among other things. These resources, and more specific assistance related to facilities support, administrative assistance and business expertise, give the company a competitive edge. A national survey of new business incubators was administered in July-August of 1985, followed up by onsite analysis and in-depth interviews with incubator managers and directors in the United States. According to the data from the 50 respondents, management and marketing are the two most important functions of incubators. Firms that participate in an incubator are almost twice as likely to succeed than fail. Four incubator models are discussed: university-related, private, community, and corporate/franchise. At the time of the survey, approximately 170 incubators have been established in the U.S., with more under development in countries such as Japan, China, France, England and Germany. Conclusions show that while the incubator concept is still in the experimental stages, its usefulness in leveraging resources, encouraging development, and promoting cross-institutional networking will ensure its continued growth. (CJC)

The Renewal Factor: How the Best Get and Keep the Competitive Edge

Abstract: In today's business environment, more than in any preceding era, the only constant is change. Somehow there are organizations that effectively manage change, continuously adapting their bureaucracies, strategies, systems, products, and cultures to survive the shocks and prosper from the forces that decimate their competition. They move from strength to strength, adjusting to crises that bedevil others in their industry. They are masters of Renewal. No organization can maintain excellence without renewing. No organization can strive for excellence, or even attempt to improve, without the ability to renew.

Financial returns and strategic interaction: The case of instant photography

Abstract: The purpose of this paper is to examine the use of shareholder returns to study the impact of complex strategic interactions that involve a sequence of moves by competing firms The paper seeks to begin to build a bridge between the capital asset pricing model of modern financial theory and competitive strategy Competition in instant photography is used as an example Results demonstrate how shareholder returns and changes in market risk (β) can be associated with both overall strategies and specific competitive moves

Forging a partnership to achieve competitive advantage: the CIM challenge

Abstract: Computer-integrated manufacturing (CIM) could well become the most important application of information technology for achieving competitive advantage. Recent advances in manufacturing and information technologies present promising new strategic alternatives for designing business systems. CIM enables firms to respond quickly to market changes, achieve economies of scope, and manage the complexity of a multi-product environment. Attaining the strategic benefits of CIM requires decision support to integrate marketing with design, design with manufacturing, and manufacturing with strategic positioning. This emerging technology requires a partnership of executives in engineering, manufacturing, marketing, and MIS who share a common vision of how CIM makes possible new approaches to designing business systems.

Distinctive Competence and Competitive Advantage

Abstract: DISTINCTIVE COMPETENCE AND COMPETITIVE ADVANTAGE Strategic planning refers to a firm's efforts to monitor, understand, and adapt to a changing environment in order to establish and maintain a favorable competitive position. Recently, attention has been directed toward assessing and improving the strategic planning activities of smaller companies. It has been claimed that systematic planning can positively affect small business success.1 The processes of environmental assessment, internal analysis, and the development of goals, objectives, and supporting strategies are typically stressed.2 These activities are often ignored or approached haphazardly by small business owner/managers.3 1 K. Mayer and S. Goldstein, The First Two Years: Problems of Small Firm Growth and Survival (Washington, D.C.: Small Business Administration, 1961); C. Orpen, "The Effects of Long-Range Planning on Small Business Performance: A Further Examination,' Journal of Small Business Management (January 1985), pp. 16-23; R. B. Robinson, Jr. and J. A. Pearce II, "Research Thrusts in Small Firm Strategic Planning,' Academy of Management Review (January 1984), pp. 128-137; and G. Vozikis and W. F. Glueck, "Small Business Problems and Stages of Development,' Proceedings of the Academy of Management National Meetings (1980), pp. 373-377. 2 J. E. Van Kirk and K. Noonan, "Key Factors in Strategic Planning,' Journal of Small Business Management (July 1982), pp. 1-7; R. Moyer, "Strategic Planning for the Small Firm,' Journal of Small Business Management (July 1982), pp. 8-14; R. B. Robinson, Jr. and W. F. Littlejohn, "Important Contingencies in Small Firm Planning,' Journal of Small Business Management (July 1981), pp. 45-48; P. H. Thurston, "Should Small Companies Make Formal Plans?' Harvard Business Review (September-October 1983), pp. 162-188; J. G. Wacker and J. S. Cromartie, "Adapting Forecasting Methods to the Small Firm,' Journal of Small Business Management (July 1979), pp. 1-7; and J. A. Timmins, M. C. Fraker, and J. Brown, "Large Firm Forecasting Techniques Can Improve Small Business Decision Making,' Journal of Small Business Management (July 1979), pp. 14-18. 3 D. L. Sexton and P. Van Auken, "A Longitudinal Study of Small Business Strategic Planning,' Journal of Small Business Management (January 1985), pp. 7-15; W. D. Jones, "Characteristics of Planning in Small Firms,' Journal of Small Business Management (July 1982), pp. 15-19; D. L. Sexton and P. M. Van Auken, "Prevalence of Strategic Planning in the Small Business,' Journal of Small Business Management (July 1982), pp. 20-26; G. H. Rice and R. E. Hamilton, "Decision Theory and the Small Businessman,' American Journal of Small Business (January 1979), pp. 7-15; T. W. Still, "An Exploratory Investigation of Strategic Planning Behavior in Small Firms,' D. B. A. dissertation, Florida State University, 1974; and T. Cohn and R. A. Lindberg, How Management Is Different in Small Companies (New York: American Management Association, 1972). Little research has focused on the development of distinctive competence, competitive advantage, and sustainable competitive advantage,4 despite the fact that these concepts are critical to the strategic thrust and eventual success of the small business. These factors must be explicitly recognized for their role in shaping a firm's strategic response to its particular competitive situation. 4 Some initial efforts in this area were made by T. Neil, "Distinctive Competence: A Marketing Strategy for Survival,' Journal of Small Business Management (January 1986), pp. 16-21; and D. G. Watkin, "Toward A Competitive Advantage: A Focus Strategy for Small Retailers,' Journal of Small Business Management (January 1986), pp. 9-15. Distinctive competence may be defined as some skill, activity, or capacity that the business is uniquely good at in comparison to rival firms.5 Producing better quality products than competitors, having a more knowledgeable and skilled workforce, or being able to react to customer demands much more quickly than competitors are examples of distinctive competence. …

Investing in Retrenchment: Avoiding the Hidden Costs

Abstract: Closing businesses and laying off excess personnel has long been regarded as a managerial prerogative in the U.S. Employers have often taken advantage of the lack of government regulation to lay off employees as quickly and cheaply as possible. The experiences of Canadian and British organizations show, however, that there are hidden costs to the firm associated with this approach. The study of ten organizations which were faced with a variety of "downsizing" exercises has identified nine managerial tasks which are crucial for successful retrenchment and which can serve to protect both employee interests and organizational needs. These tasks revolve around a view of retrenchment as an investment in future viability—and it deserves the same creative analysis as any other competitive strategy.

The Entrepreneurial Institute: Education and Training for Minority Small Business Owners

Abstract: SMALL BUSINESS STRATEGIES IN DIFFERENT INDUSTRY GROWTH ENVIRONMENTS The notion that the growth stage of an industry may affect the competitive strategies of firms has received much attention in the literature.1 But until recently, prescriptions for success have been developed primarily for growth environments, the implication being that firms should avoid non-growth industries.2 Researchers have now begun to explore viable strategies for the maturity and decline phases as well. A general conclusion is that while high volume and high market share are desirable components of effective strategies in a growth environment, in the maturity and decline phases, firms should attempt to pursue high-profit strategies, even if that means lower volume.3 1 C. R. Anderson and C. P. Zeithaml, "Stage of the Product Life Cycle, Business Strategy, and Business Performance,' Academy of Management Journal, vol. 27 (1984), pp. 5-24; W. K. Hall, "Survival Strategies in a Hostile Environment,' Harvard Business Review, vol. 58 (1980), pp. 75-87; D. C. Hambrick, I. C. Macmillan, and D. L. Day, "Strategic Attributes and Performance in the BCG Matrix--A PIMS-Based Analysis of Industrial Product Businesses,' Academy of Management Journal, vol. 25 (1982), pp. 510-531; R. G. Hammermesh and S. B. Silk, "How to Compete in Stagnant Industries,' Harvard Business Review, vol. 57 (1979), pp. 161-168; K. R. Harrigan, "Strategies for Declining Industries,' Journal of Business Strategy, vol. 1 (1980), pp. 20-34; C. W. Hofer, "Toward a Contingency Theory of Business Strategy,' Academy of Management Journal, vol. 18 (1975), pp. 784. 810; M. E. Porter, Competitive Advantage (New York: Free Press, 1985); and M. E. Porter, Competitive Strategy (New York; Free Press, 1980). 2 B. Hedley, "Strategy and the "Business Portfolio,'' Long-Range Planning, vol. 10 (1977), pp. 9-15; and B. Henderson, Henderson on Corporate Stragegy (Cambridge, Mass; Abt Books, 1979). 3 Hall, "Survival Strategies'; Hammermesh and Silk, "How to Compete'; Hambrick, et al., "Strategic Attributes'; Harrigan, "Strategies for Declining Industries'; and Porter, Competitive Strategy. Much of this research has been done for large firms, and it is not clear how well these prescriptions apply to small businesses. Therefore, this article presents the results of an empirical study of profitable small business strategies under conditions of growth, maturity, and decline. RELATED RESEARCH Previous researchers distinguish three main stages of industry growth: (1) growth, (2) maturity, and (3) decline. The business or competitive strategies that help firms to achieve profits are thought to differ under each of these stages.4 The findings of previous research on strategies adopted by large businesses under different growth conditions are summarized in table 1. 4 Anderson and Zeithaml, "Stage of the Product Life Cycle'; Hambrick, et al., "Strategic Attributes'; Hofer, "Toward a Contingency Theory'; and Porter, Competitive Strategy. In growth industries, the overall competitive pressure is limited, and a firm has a comparatively broad range of choices among strategies. Many researchers imply that this is the most hospitable environment in which to operate and earn profits. The "learning curve' is a major tool for the large firm to use to gain competitive advantage; hence high market share is often helpful. One interesting result is that while resource efficiencies, product quality, market share, and high levels of future-oriented investments have commonly been employed as strategies in growth industries, they have had little impact on profit performance. In mature industries, the environment presents severe competitive pressures. High market share firms are thus thought to be better off emphasizing resource efficiency and avoiding investments, while the low market share firm is usually advised to seek profitability through product differentiation, market segmentation, and the technological superiority of its products and services. …

The Structure of Equilibria in Market Share Attraction Models

Abstract: A market share attraction model of competitive effort allocation by two firms is formulated as a constant sum, two-person game. The dependence of optimal competitive effort allocations on factors such as gross profit margins, relative effectiveness of effort, and attraction elasticity of effort is studied. Two versions of the model are developed. In the first version, effort budgets of both competitors are exogenously fixed. In the second, the competitors each choose both budget levels and allocations. In each version of the model, an important function of the parameters, called the competitive advantage ratio, indicates when it is optimal to either increase or decrease effort allocated in a market in response to changes in various measures of effectiveness. Implications of differences in the cost associated with each competitor's budget on equilibrium allocations are derived.

Benchmarking: The key to developing competitive advantage in mature markets

Abstract: Many U. S. businesses face slower economic growth, increased foreign competition, and customers who are increasingly sensitive to price. As a result, a brilliant strategy is no longer enough to guarantee marketing success. Rather, U.S. corporations are increasingly focusing on developing an operational competitive advantage in R&D manufacturing, sales, and marketing. In response to this challenge, strategic planners at such corporations as Xerox, Ford, and GTE have begun to introduce a new planning tool called “benchmarking.”