Showing papers on "Competitive advantage published in 1988"

Managing Quality: The Strategic and Competitive Edge

Abstract: The article presents a review of the book “Managing Quality: The Strategic and Competitive Edge,” by David A. Garvin.

Joint ventures and competitive strategy

Abstract: A framework for using joint ventures (and other forms of cooperative strategy) within varying competitive environments is constructed, and hypotheses are developed concerning the impact of particular industry traits upon firms' options in pursuing them. Industry examples illustrate the framework's hypotheses. In this framework, demand traits suggest what types of cooperative strategies are needed. Competitor traits suggest how firms will respond to these needs for cooperation. Since joint ventures can be inherently unstable organizational forms, it is important for managers to (1) select the right cooperative strategy option and (2) modify the autonomy from (and coordination with) sponsoring firms that ventures enjoy as their industry structures evolve. Familiarity with cooperative strategy options is important because (1) as growth slows, (2) as markets shrink or become crowded, (3) as industries become global, or (4) as technological change accelerates to speeds where individual firms cannot recover their initial investments, managers will have less margin for error. If managers do not learn how to use cooperative strategies advantageously their firms may encounter difficulties in delivering adequate value to their customers, replenishing their base of skills, andlor safeguarding their abilities to increase long-term shareholder value.

Creating competitive advantage with interorganizational information systems

Abstract: Many well-known examples of the use of information technology for competitive advantage involve systems that link an organization to suppliers, distribution channels, or customers. In general, these systems use information or processing capabilities in one organization to improve the performance of another or to improve relationships among organizations.Declining costs of capturing and using information have joined with increasing competitive pressures to spur numerous innovations in use of information to create value. This article draws on concepts of competitive advantage and on experience gained from successful innovations to generate classifications and a framework to guide the search for opportunities. The ideas do not constitute a procedure leading inexorably to competitive advantage. However, they have been of value when combined with an appreciation of the competitive dynamics of specific industries and a grasp of the power of information.

The Leadership Factor

Abstract: Because they are victims of short-term economic pressures and "parochial politics", most American companies critically lack the one factor proven effective in winning competitive advantage: leadership. Thus argues John P. Kotter in this, his third large-scale work on leadership, which continues and complements the work begun in his influential "The General Managers" and "Power and Influence". With compelling evidence, Kotter demonstrates why most American firms do not have the leadership capacity they currently need and explains what they must do to correct this damaging problem. Using comprehensive data from 900 senior executives in 100 American corporations, as well as in-depth interviews with 150 top managers in fifteen successful companies, including General Electric, Citicorp, IBM, Hewlett-Packard, and Coca-Cola, Kotter singles out the practices that develop superior leadership. He identifies both the specific personal attributes and general leadership qualities needed in today's corporations. And, with the spotlight on such individuals as Lee Iacocca at Chrysler and teams like the top management at Johnson & Johnson, he vividly illustrates the four factors that create outstanding leadership in both private and public sector senior and middle level managers. Professor Kotter underscores his argument with glaring examples of managerial failures in firms like ITT, providing eye-opening evidence of damage-- inability to control sagging productivity and poor records in customer service, quality control, and the development of new products-- caused primarily not be poor R&D or labor problems, but by a weak leadership capacity. Filled with dozens of case histories, "The Leadership Factor" reveals an all-too-common picture of companies which, unable to recognize or develop leadership talent and utilize it, create a pervasive gap in corporate planning and personal management. Progress has been made in improving quality management, but is has been limited. Kotter is hard-hitting in his assessment that even American companies which achieve a superior level of success in the leadership area-- IBM, DuPont, Dow Jones, Hewlett-Packard, and Anheuser-Busch, for example, must do even better to match efforts of foreign competitors. In showing how leaders are made, not born, he provides a realistic program structured to help attract, retain, and motivate dynamic, capable leaders in executive and middle management positions. Following Kotter's advice, companies can build strong managerial teams necessary not only for growth-- but also for survival itself.

Differentiation Versus Low Cost or Differentiation and Low Cost: A Contingency Framework

Abstract: In the policy literature there is an assumption that the generic business-level strategies of differentiation and overall cost leadership are generally inconsistent. Contrary to this view, this article presents a contingency framework in which differentiation can be a means for firms to establish an overall low-cost position and discusses that a combination of differentiation and low cost may be necessary for firms to establish a sustainable competitive advantage.

Airline reservations systems: lessons from history

Abstract: This article discusses the evolution of airline reservation systems - from their inception as manually maintained inventories of seat availability, through their description as "anticompetitive weapons" used "unlawfully" to obtain and exercise monopoly power. The evolutionary perspective reveals interdependent industry, company, and technology forces that shaped the pattern of competition. Although many facets of the airline experience are unique to the air transport industry, the authors identify three features with broad implications for the strategic use of information technology. First, large installed processing capacity can be a source of economies of scale and scope. Second, established technical competence is a necessary requirement for gaining competitive advantage. Finally, sustainable advantage need not be the result of extraordinary vision, but the result of consistent exploitation of opportunities revealed during the evolution of adaptable systems.

Developing capabilities to use information strategically

Abstract: Efforts to deploy information technology for competitive advantage in eleven industries are evaluated through a field study. Findings are based on analysis of interviews with senior executives of a major competitor in each industry. Findings indicate that competitive advantage depends on the interaction between industry conditions and internal capability to identify and exploit opportunities. Internal capabilities and conditions and the processes that created these capabilities are defined and described. A brief review of the value added chain model from economics is included based on the authors' conclusion that this model is useful both for understanding the experience of companies in the study and as a guide in searching for opportunities.

Strategic alliances, organizational learning, and competitive advantage: The HRM agenda

Abstract: Partnerships and alliances between two or more multinational firms are becoming increasingly common Recent examples include ATT a tripartite venture of Honeywell, Bull, and NEC in computer mainframes; Philips and ATT Toyota and General Motors' joint manufacturing at NUMMI; or General Electric and Fanuc's worldwide collaborative network in robotics New strategic alliances are not limited to the manufacturing sector, they are increasingly frequent in the financial sector (eg, the joint venture of Credit Suisse and First Boston Corporation or the tie-up of Nippon Life and Shearson Lehman) and other service industries as well

Export Strategy for Small Business

Abstract: EXPORT STRATEGY FOR SMALL BUSINESS Exporting is increasingly seen as an opportunity for corporate growth and increased profitability among small-to medium-sized firms in many industries. Many U.S. markets have become or are becoming international, mainly because of reduced market differences among such major trade powers as the United States, Japan, and the European countries. Many companies also look to foreign markets because of intensified competition at home, maturing domestic markets, or limited domestic market opportunities. Exporting as a means to corporate growth is particularly appropriate for manufacturers of industrial goods or products with innovative advantages, and for smaller firms without the financial and managerial resources necessary for more extensive international operations such as joint ventures and foreign direct investment.(1) (1)Robert G. Cooper and Elko J. Kleinschmidt, "The Impact of Export Strategy on Export Sales Performance," The Journal of International Business Studies (Spring 1985), pp. 37-55. Dr. Namiki is an associate professor of management at California State University in Sacramento. He is co-author of The False Promise of the Japanese Miracle (Pitman Publishers) and a number of articles on business strategy. Although competition in export markets has become important for many small firms in the United States, studies have rarely been conducted of competitive strategy in export markets.(2) Many studies of competitive strategy employed by firms in the U.S. market have found that firms competing in the same industry or similar environments tend to use more than one type of strategy, and certain types of strategy lead to better corporate performance than others.(3) In other words, the current trend in strategic management research is to classify firms by strategy type or group, and then to identify successful strategy types within a given industry or set of circumstances. This type of research is called "strategic group analysis." Few studies, however, have examined export strategy types and their effect (2) For an example, see Kendall Roth and Patricia P. McDougall, "An Empirical Comparison of Domestic and International Strategic Behavior," paper presented at the 46th Annual Academy of Management Meeting, August 1986, Chicago. (3) See, for example, Gregory G. Dess and Peter S. Davis, "Porter's (1980) Generic Strategies as Determinants of Strategic Group Membership and Organizational Performance," Academy of Management Journal (September 1984), pp. 467-488. on performance, especially for small business exporters. Most studies of exporters have investigated the relationship between firm or market characteristics (e.g., commitment to export, size of foreign markets and size of firm) and export performance.(4) Other studies have examined the relationship between a firm's export marketing activities (e.g., product adaptation and market segmentation) and export performance.(5) This article presents the results of a strategic group analysis of small firms competing in export markets. The following questions are addressed: . What types of strategy are followed by small firms in export markets? . What types of strategy are instrumental in providing small firms with competitive advantages in export markets, thereby leading to export success? COMPETITIVE STRATEGY Many studies have reported that several different types of strategy are pursued by firms within an industry, and certain types of strategy tend to outperform others. Examples of strategy types are Porter's generic strategies (differentiation, low cost leadership, and focus) and Miles and Snow's typologies (defenders, prospectors, analyzers, and reactors).(6) The present study (4)For example, Salih T. Cavusgil, "Organizational Determinants of Firms' Export Behavior: An Empirical Analysis," unpublished doctoral dissertation, University of Wisconsin-Madison, 1976; Seev Hirsh, "Technological Factors in the Composition and Direction of Israel's Industrial Exports," The Technology Factor in International Trade, ed. …

Factors for Success in Small Manufacturing Firms

Abstract: FACTEURS DE REUSSITE DANS LES PETITES ENTREPRISES DE MANUFACTURE Cet article presente les resultats d'une etude portant sur 22 petites entreprises de manufacture localisees dans Ie Nord-Ouest du Wisconsin. Les compagnies representees dans cet echantillon ont ete analysbes par rapport A l'accroissement moyen des ventes dans leur secteur industriel, pendant une periode de trois ans. Les compagnies ayant atteint ou depasse Ie taux general de croissance ont ete classees comme entreprises "reussies"; celles ayantatteint un taux de croissance inferieur au taux moyen de l'industrie representee ont ete considerees comme "moins reussies". Les resultats de l'equete revelent que les modes d'exploitation et une aptitude a la specialisation sont des facteurs cle pour la reussite. Les compagnies ayant reussi avaient gagne en competitivite en se specialisant-produits, marches, clientele. Small business failure is a common occurrence. Recent data indicate a failure rate of about 70 percent. At the same time, small business has been cited as a major contributor to economic growth and job creation. The purpose of this article is to explore the factors that may have an impact on the success of small manufacturing enterprises. Because the study is exploratory, it does not identify industry-specific strategies, managerial abilities, or other specific characteristics related to the successful operation of small manufacturing firms. Nevertheless, the study provides the basis for more refined research that will enable us to develop guidelines for business organization, strategy, and employment of resources. Such guidelines could help to improve the ability of small business enterprises to develop and prosper in an increasingly competitive and complex world. BACKGROUND Successful businesses must seek a balance between the ends to which the organization aspires and the ways and means available to achieve them. A study of 37 well-run companies carried out by the consulting firm of McKinsey & Company found seven policy areas that affected long-term organizational success..sup.1 These areas are strategy, structure, systems, staff, skills, style, and shared values or goals. Other researchers have suggested that low market-share businesses can compete effectively through specialization..sup.2 Specialization can include products, markets, and customers as well as price, cost, manufacturing capability, and other factors. Porter has suggested that competitive scope can have a powerful impact on competitive advantage.sup.3 Narrow scope or specialization can provide a competitive advantage through the ability of a firm to provide products and services or perform activities better than more broadly based competitors. Based on the findings reported above, it is suggested that a successful small manufacturing business is likely to have the following characteristics. * An owner/ manager with experience in the business. * Specialized knowledge of manufacturing processes or product knowledge. * Previous supervisory or managerial experience. * Access to adequate financial resources. * A competitive advantage based on costs, product specialization, customer specialization, or various forms of price/ quality specialization. * A well-developed strategy developed through a formal or informal process. SAMPLE AND METHODOLOGY A sample of 30 small manufacturing companies was drawn from the Chamber of Commerce and Industrial Directories in northwest Wisconsin. The small sample size was dictated by limited resources and the small total number of manufacturing industries in the region. Personal interviews were conducted in order to elicit greater depth and clarity of response than could be accomplished using a mailed questionnaire. For purposes of the study, a small manufacturer was defined as one having fewer than 200 employees. …

Innovation and the productivity crisis

Abstract: The collapse of U.S. productivity growth since the late 1960s has been the most severe and persistent of recent economic problems. This volume reviews the extent of the growth slowdown, evaluates several contributing factors, and suggests strategies for improvement. The authors find that inflation, recessions, oil price fluctuations, and other economic disruptions in the 1970s had an averse effect on economic performance, but, they suggest, a slowing in the pace of innovation and a failure to exploit the benefits of innovation also contributed to the weakness in productivity.Baily and Chakrabarti provide a comprehensive assessment of U.S. technology policy and its importance to growth. They argue for continued support of basic science, even though strength in this area does not give the U.S. economy an immediate competitive advantage, and advocate increased support for "middle ground" and commercial research. They conclude that this support must be structured to preserve the advantages of the market.

Strategies for product cannibalism

Abstract: This paper explores the question of when (or if) a market leader firm is best off with a strategy of product cannibalism: introducing a new product designed to supersede and hence destroy its own current bestseller before a rival does. Particular attention is given to the payoffs of various superseding product strategies and, given these strategies, whether the leading firm can be expected to invest at least as much in innovation as a challenger. A patent-race game with a stochastic invention process is presented. The result is that when the leading firm deliberately decides to forgo being first-mover in the new market, developing and then ‘shelving’ its new product until the current bestseller is challenged successfully by the rival, the leading firm may spend more than its challengers on R&D, thereby retaining a competitive advantage in innovation of new-generation products. The paper concludes with a discussion of the practical implications of the model.

Developmental States and Markets in East Asia: An Introduction

Abstract: For Friedrich List, concerned above all with how Germany could develop manufacturing industry at a time when British manufacturers were sweeping all before them, the distinction between these two kinds of economics was vital. What we know as classical economics was List’s ‘cosmopolitical economy’. It operated on the Enlightenment assumption of citizens of the world as economic individuals, seeking competitive advantage in free international and internal trade. Marxian economics introduced class distinctions, but gave the division of citizens of the world into nation-states no more significance than it had in classical economics.

Information management : the strategic dimension

Abstract: Part 1 Strategy and information technology: technology and strategic management - a research review, John McGee and Howard Thomas IT and strategic advantage - a framework of frameworks, Michael J. Earl strategy formulation methodologies and IT, Michael Scott Morton. Part 2 Strategic exploitation of information technology: using information technology for competitive advantage, William King et al exploiting IT in business development - Ford in Europe, Graham Gooding creating and sustaining competitive advantage with IT, David Feeny. Part 3 Formulating IT strategies: gaining competitive advantage from telecommunications, David Runge and Michael Earl experiences in IT strategy formulation - Imperial Chemical Industries plc, Derek Seddon formulation of information systems strategies - emerging lessons and frameworks, Michael Earl. Part 4 Managing IT strategy: information technology strategies today - the UK experience, Robert Galliers implementing an IT strategy - the UK Inland Revenue, Steve Matheson strategies for managing end-user computing, Martin Lockett. Part 5 IT strategy and organization: organization and control of development in information technology in Volvo, Karl-Henrik Hubinette information technology, strategy and leadership, Michael Earl et al rebuilding of information systems - the human resources, Peter Keen. Section 6 IT and strategy - reflections and directions information management - some strategic reflections, Michael Earl.

After the sale: leveraging maintenance with information technology.

Abstract: Post-sale maintenance is already an important part of the competitive strategy of some firms and will become increasingly important to many others in the future. Information technology can be a significant factor in leveraging investments in maintenance and in directing a firm's overall approach to the maintenance issue. This paper presents a conceptual framework for understanding, along with a series of examples that illustrate, the role information technology can play in the maintenance process. The framework and examples are intended to serve as a catalyst for identifying applications of information technology to post-sale maintenance.

Controlling Competitive Dynamics by Taking Strategic Initiative

Abstract: Today the popular press as well as the academic literature is replete with discussions of the increased turbulence of competition. The surviving competitors in the wake of this past decade's turbulent times are highly competent, aggressive, and possess significant resources. The implication for corporate strategy is that any competitive advantage currently held will eventually be eroded by the actions of these competent, resourceful opponents. It is no longer a question of whether the current competitive advantage will be eroded but rather a question of when. As a result, the challenge for today's strategist is to constantly seek the "second act" even as the firm is benefiting from the current competitive advantage it should be laying the groundwork for the upcoming competitive advantage. This challenge is best depicted by Exhibit 1. From the time the firm decides to make some strategic move to secure the initiative to the time that this initiative has been achieved and some type of competitive advantage has been created, is called the launch period. It is critical to minimize this period of time. The longer it takes to get an initiative in place, the more likely it is competitors will spot the move and the more time they will have to develop a counterinitiative. Furthermore, the launch period is a period of investment rather than revenue generation. So the longer it takes, the more we have to discount the revenue streams that result from having secured the initiative. In today's high cost capital markets, projects with long launch periods and high early outlays seldom return a positive net present value.

Competition and Marketing Strategy

Abstract: Processes of competition lie at the heart of the literature of marketing strategy. Indeed, it could be argued that competitors and sustainable competitive advantage are to marketing strategy what customers and the marketing concept are to marketing. The principle of sustainable competitive advantage argues that a firm can only be successful in the marketplace if its products and services have a competitive edge over those of its rivals. This edge should be one that is both important to customers and sustainable by the firm in the long run.

The Cooperative/Competitive Strategy Scale: A Measure of Motivation to Use Cooperative or Competitive Strategies for Success

Abstract: Previous research (Simmons, King, Tucker, & Wehner, 1986) has demonstrated that the use of either a cooperative or a competitive strategy to achieve success has a strong influence on attitudes of North Americans toward the successful outcome In the present study, a scale was constructed to measure positive and negative attitudes toward success and toward competitive and cooperative success strategies The Cooperative/Competitive Strategy Scale yielded three subscale factors: (a) motivation to use competitive strategies to achieve success, (b) motivation to use cooperative strategies to achieve success, and (c) motivation to avoid competitive strategies and their successful outcomes There were no sex or age differences in subscale responses Significant correlations were obtained between total scores on the Fear of Success Scale (Zuckerman & Allison, 1976) and both competitive subscales of the Cooperative/Competitive Strategy Scale The cooperative strategy subscale was independent of scores on

A Generic Model of Competitive Dynamics

Abstract: Using catastrophe theory, this article presents a generic model of competitive dynamics that allows for the integration of structural (industry inertia) and process (relative competitive force) components of competitive dynamics found in the marketplace. More specifically, this article presents a cusp catastrophe model to account for the variety of ways changes in competitive position can occur among competing businesses in an industry, and it builds on the growing body of catastrophe applications to organizational and managerial contexts.

Does competitive strategy work for small business

Abstract: The hypothesis is that the theory of competitive strategy developed by Michael E. Porter (1) is not useful as a strategic planning tool in small business. In small and medium-sized firms, the choice between overall cost leadership, overall differentiation and focus is really not an issue, since these firms only have the focus option. A new framework is introduced to allow small firms to classify themselves and their competitors as one of four generic firm types: prospector, defender, analyzer or reactor. An application of this framework to the Canadian electrical distribution industry is discussed.

Exploring the Linkage Between Strategic Groups and Competitive Strategy

Abstract: (1988). Exploring the Linkage between Strategic Groups and Competitive Strategy. International Studies of Management & Organization: Vol. 18, Strategic Management Research, pp. 6-25.

How to gain (and maintain) the competitive advantage in business.

Abstract: In today's competitive, niche-oriented market, it is more important than ever to anticipate a competitor's moves. This practical book shows how to do just that, including how to plot competitive moves and demographics, identify winners in an industry, spot allies and more. 37 illustrations.

Training—the competitive edge: Introducing new technology into the workplace.

Abstract: A Publication of Work in America Institute Draws on an extensive three-year study of successful corporate practices to show how to incorporate training into an organization's strategic planning so that new technologies are smoothly integrated into the daily work lives of employees. Offers practical advice on the financing, content, and delivery of effective training.