Showing papers on "Competitive advantage published in 1990"

The competitive advantage of nations

Abstract: The Need for a New Paradigm - PART I: FOUNDATIONS - The Competitive Advantage of Firms in Global Industries - Determinants of National Competitive Advantage - The Dynamics of National Advantage - PART II: INDUSTRIES - Four Studies in National Competitive Advantage - National Competitive Advantage in Services - PART III: NATIONS - Patterns of National Competitive Advantage: The Early Postwar Winners - Emerging Nations in the 1970s and 1980s - Shifting National Advantage - The Competitive Development of National Economies - PART IV: IMPLICATIONS - Company Strategy - Government Policy - National Agendas - Epilogue - Appendices - References

Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage

Abstract: This article addresses the issues of competitive advantage and competitor imitation. It is argued that tacitness, complexity, and specificity in a firm's skills and resources can generate causal ambiguity in competency-based advantage, and thus raise barriers to imitation. Reinvestment in causally ambiguous competencies is necessary to protect the advantage. Without reinvestment, attritional effects of continued competitive action will cause decay in the barriers to imitation. From this theorizing, research propositions are suggested, which, ultimately, will lead to an improved understanding of competitive advantage sustainability.

The role of management control systems in creating competitive advantage: New perspectives

Abstract: For the last two decades, management control systems have been conceputalized in terms of implementing a firm’s strategy. This view fails to recognize, however, the power of management control systems in the strategy formulation process. Based on a 2 year field study, a new model is presented to show how interactive management control systems focus organizational attention on strategic uncertainties. This process is examined in two competing firms to illustrate how top managers use formal systems to guide the emergence of new strategies and ensure continuing competitive advantage.

Competing Against Time: How Time-Based Competition is Reshaping Global Markets

Abstract: Today, time is on the cutting edge. In fact, as a strategic weapon, contend George Stalk, Jr., and Thomas M. Hout, time is the equivalent of money, productivity, quality, even innovation. The ways leading companies manage time - in production, in new product development, and in sales and distribution - represent the most powerful new sources of competitive advantage. Time consumption, like cost, is quantifiable and therefore manageable. Today's new generation companies recognize time as the fourth dimension of competiveness and, as a result, operate with flexible manufacturing and rapid-resource systems, expanding variety and increasing innovation. Factories are close to the customers they serve. Organization structures enable fast responses rather than low costs and control. Companies concentrate on reducing if not eliminating delays and using their response advantages to attract the most profitable customers. As Stalk and Hout explain, virtually all businesses can use time as a competitive weapon. Using examples of leading Japanese and American companies they illustrate the processes involved in becoming a time-based competitor and how managers can open and sustain a significant advantage over the competition.

Taxonomic Mental Models in Competitor Definition

Abstract: In this article, a cognitive approach to the problem of competitor definition is outlined, which begins with a discussion of the information-processing demands implied by current models of competitive strategy. How decision makers simplify the competitive environment by using a mental model of competitive groups is then discussed. Finally, the implications of a cognitive approach for the classifying organizations and organizational adaptation are commented on.

Market Driven Strategy: Processes for Creating Value

Abstract: Explosive technological change is rapidly creating countless new market opportunities. The author provides a proven market-driven approach to formulating and implementing competitive strategy at the business unit level - "in the trenches". Day introduces the five critical strategic choices that managers must make - in selecting channels, in product differentiation, in pricing - that will yield a competitive advantage.

The Critical Path to Corporate Renewal

Abstract: "The Critical Path to Corporate Renewal" is a practical and effective agenda for revitalizing the corporation Through an in depth analysis of six companies that have undergone fundamental changes, the authors describe what works and what doesn't in corporate renewal It describes the many common errors companies make in getting started The human sources of competitive advantage - coordination, commitment, and competence - cannot be enhanced through programs Successful corporate renewal occurs only when plants, divisions, and departments involve employees That must be done through a carefully designed series of steps - the critical path - led by unit general managers Companies that have followed this strategy have flatter and less hierarchical organizations, employees who take initiative to reduce costs and improve quality, and enhanced teamwork at all levels

Beyond products: services-based strategy.

Abstract: Services technologies are changing the way companies in every industry--manufacturers and service providers alike--compete. Vertical integration, physical facilities, even a seemingly superior product can no longer assure a competitive edge. Instead, sustainable advantage is more and more likely to come from developing superior capabilities in a few core service skills--and out-sourcing as much of the rest as possible. Within companies, technology is increasing the leverage of service activities: today, more value added comes from design innovations, product image, or other attributes that services create than from the production process. New technologies also let independent enterprises provide world-class services at lower costs than customers could achieve if they performed the activities themselves. These changes have far-reaching implications for how managers structure their organizations and define strategic focus. Companies like Apple, Honda, and Merck show that a less integrated but more focused organization is key to competitive success. They build their strategies around a few highly developed capabilities. And they outsource as many of the other activities in their value chain as possible. To help managers develop an activity-focused strategy, the authors offer a new way to approach competitive analyses, guidelines for determining which activities to outsource and which to retain, and an overview of the risks and rewards of strategic outsourcing. Throughout, they draw on the findings of their three-year study of the major impacts technology has had in the service sector.

The power of product integrity.

Abstract: In the dictionary, integrity means wholeness, completeness, soundness. In products, integrity is the source of sustainable competitive advantage. Products with integrity perform superbly, provide good value, and satisfy customers' expectations in every respect, including such intangibles as their look and feel. Consider this example from the auto industry. In 1987, Mazda put a racy four-wheel steering system in a five-door family hatchback. Honda introduced a comparable system in the Prelude, a sporty, two-door coupe. Most of Honda's customers installed the new technology; Mazda's system sold poorly. Potential customers felt the fit--or misfit--between the car and the new component, and they responded accordingly. Companies that consistently develop products with integrity are coherent, integrated organizations. This internal integrity is visible at the level of strategy and structure, in management and organization, and in the skills, attitudes, and behavior of individual designers, engineers, and operators. Moreover, these companies are integrated externally: customers become part of the development organization. Integrity starts with a product concept that describes the new product from the potential customer's perspective--"pocket rocket" for a sporty, subcompact car, for example. Whether the final product has integrity will depend on two things: how well the concept satisfies potential customers' wants and needs and how completely the concept has been embodied in the product's details. In the most successful development organizations, "heavyweight" product managers are responsible for leading both tasks, as well as for guiding the creation of a strong product concept.

Strategic groups and performance: the u.s. insurance industry, 1970-84

Abstract: The concept of strategic groups has been accepted as an important unit of analysis in understanding competitive strategy (Porter, 1980; McGee and Thomas, 1986; Hatten and Hatten, 1987). This study builds upon previous research (Hatten et al., 1978; McGee and Thomas, 1986; Harrigan, 1985; Cool, 1985; Cool and Schendel, 1987, 1988) and provides a general framework for the formation of strategic groups based upon important aspects of firm strategy. This framework is applied to the insurance industry over the 1970–84 time period and strategic implications are drawn. The empirical findings demonstrate that some performance differences exist among strategic groups, and also indicate that the structure of strategic groups (both in terms of the number, and the membership) changes over time. The use of this framework for understanding competitive positioning and developing dynamic theories of strategic group movement is also discussed.

The Supplier Development Program: A Conceptual Model

Abstract: The Supplier Development Program: A Conceptual Model In order to compete effectively in the world market, a company must have a network of competent suppliers. A supplier development program is designed to create and maintain such a network--and to improve various suppliers capabilities that are necessary for the buying organization to meet its increasing competitive challenges. This article details a conceptual model that describes the organizational decision process associated with a supplier development program. The proposed decision model can serve as a guideline for designing a supplier development program that can link purchasing strategy with a firm's overall corporate competitive strategy. Empirical evidence drawn from the experience of several companies actively involved with such a program is used to validate the model. In recent years, purchasing and materials management activities in many U.S. companies have been getting close attention from top management with respect to their contributions to overall corporate performance. This increasingly sharp focus is a direct result of mounting pressures--internal and external--from sources such as rapidly rising material costs, high costs of capital, and increasing competition from foreign competitors. In response to these mounting pressures, some purchasing managers have upgraded their buying and management personnel through better selection and training. Many have also reexamined their existing materials management policies. The recent introduction of "just-in-time" production and purchasing has created an additional impetus to reconsider many traditional purchasing objectives and practices. One of the key areas under scrutiny involves supplier development programs. Traditionally, one of the most important objectives of the purchasing function has been the development of a network of competent suppliers. In the final analysis, a firm's ability to produce a quality product at a reasonable cost, and in a timely manner, is heavily influenced by its suppliers' capabilities. Consequently, without a competent supplier network, a firm's ability to compete effectively in the market can be hampered significantly. Yet, a careful review of existing textbooks and research articles appearing in the professional journals reveals that very little publication space has been devoted to the subject. In fact, most of the existing coverage of supplier development topics in purchasing texts tends to be brief and lacks specifics.[1] Moreover, a review of recent issues of the professional journals in the field identified only one research article directly addressing the supplier development issue. This article represents one step in filling that void. The basic purpose of the article is to conceptualize the supplier development program. Specifically, it proposes a conceptual model that describes the organizational decision process for creating and refining a supplier development program. The model can also facilitate implementation and future research into the subject area. Interwoven throughout the article is empirical evidence drawn from several companies that actively use supplier development programs; this evidence is used to validate the model. OBJECTIVES OF A SUPPLIER DEVELOPMENT PROGRAM The basic objective of the purchasing function is to secure competent supply sources that will provide an uninterrupted flow of required materials at a reasonable cost. This involves first the selection of competent suppliers in terms of technological, quality, delivery, and cost capabilities--and second, it requires working with them to upgrade their capabilities. A supplier development program, then, can be defined as any systematic organizational effort to create and maintain a network of competent suppliers.[2] In a narrow sense, it involves the creation of new sources of supply when there are no adequate suppliers to meet the firm's requirements. …

Organizational Capability: Competing from the Inside Out

Abstract: Changing Vistas for Management Thought. Forces for Change: The Call for Competitive Advantage. Competitive Advantage from the Inside Out through Organizational Capability. Creating Shared Mindset: Unity of Culture. Management Practices: Tools for Action. Generating Competencies: Selection and Development. Reinforcing Competencies: Appraisal and Rewards. Sustaining Competencies: Organization Design and Communication. Influence Management for the 1990a s. The Capacity for Change. Flexible Arrangements. Leadership. The Capable Organization: Key Questions and Principles. Epilogue: Reducing Potential Future Threat. Notes. Bibliography. Index.

An Empirical Investigation of Factors Influencing the Success of Customer-Oriented Strategic Systems

Abstract: A case research strategy was utilized to study first-mover strategic systems which companies had built and offered to their customers in support of a primary product or service. The study investigated eleven systems to discover the factors which enabled or inhibited the following outcomes: developing a first-mover customer-oriented strategic system (COSS); achieving a high level of adoption of the COSS by customers; obtaining competitive advantage from the COSS. In general, the findings supported previous research in the IS implementation and strategic systems literature. Factors that are related to the successful implementation of information systems and the competitive environment of the firm were associated with systems that were developed and introduced to the market first. Factors that are related to the adoption of innovations and information systems and to successful product marketing were associated with high adoption. There were several findings which had not been previously reported in the liter...

Information asymmetries: a source of competitive advantage for diversified service firms

Abstract: Information asymmetries are generally considered as leading to costs for both parties in an exchange transaction. They can, however, also be a source of competitive advantage. Potential buyers face information asymmetries in evaluating services prior to purchase. Since such asymmetries impose costs on buyers, there exists an incentive to lower such costs. This incentive may be exploited by service firms that diversify into other services that meet the needs of existing customers.

Competitive advantage on the shop floor

Abstract: Introduction: Organization, Technology, and Value Creation PART I Theory and History in the Nineteenth Century Theory and History in Marxian Economics From Surplus-Value to Value Creation Minders, Piecers, and Self-Acting Mules More Than One Way to Spin a Mule Spinning and Weaving to Industrial Decline PART II Competitive Realities in the Twentieth Century The Persistence of Craft Control Managerial Capitalism and Economies of Speed Perspectives on the Twenties The Challenge of Flexible Mass Production Organization and Technology in Capitalist Development Appendix: The Basic Analytics of Shop-Floor Value Creation Notes Index

The Innovation Marathon: Lessons from High Technology Firms

Abstract: Microelectronics firms in the U.S. face one of the most intensely competitive business environments in the world, leading the way for all industries. In automobiles, textiles, steel, and other basics as well as service businesses, intense global competition from increasingly skilled rivals is a fact of life. In such markets, success lies in repeated, successful innovation coupled with business control.Draws on extensive field interviews to look at how five top U.S. electronics firms--Hewlett-Packard, Intel, Motorola, National Semiconductor, and Texas Instruments--manage repeated innovation while controlling the most demanding mass production process ever designed. Provides a blueprint for managing innovation by showing where innovative ideas come from, how companies nurture an innovative environment, how successful firms organize for innovation, and most importantly, how innovation can lead to competitive advantage.

New venture strategies: An empirical identification of eight ‘archetypes’ of competitive strategies for entry

Abstract: Previous literature on competitive strategies for new ventures differs significantly on the appropriate domain breadth for new ventures, niche versus aggressive coverage. While this study does not address normatively the appropriateness of either approach, it reveals eight distinct ‘archetypes’ of competitive strategy for entry with both niche and broad strategies represented. In this study 247 new venture CEOs from the information processing industry were asked to describe their venture's competitive strategy for entry using twenty-six competitive methods. Factor and subsequent cluster analysis uncovered these eight different ‘archetypes’: (1) aggressive growth via commodity type products to numerous markets with small customer orders; (2) aggressive growth via price competitive new products to large customers; (3) aggressive growth with narrow, special products priced competitively to a few larger buyers; (4) controlled growth with broad product range to many markets and extensive backward integration; (5) controlled growth via premium priced products sold directly to consumers; (6) limited growth in small niches offering a superior product and high customer service; (7) average growth via steady development of new channels, brand/name ID, and heavy promotion; and (8) limited growth selling infrequently purchased products to numerous markets with some forward integration.

Airport presence as product differentiation

Abstract: There is now widespread recognition that an airline's operation at a given airport greatly affects its competitive position on routes flown out of that airport (see M. Levine, 1987; S. Borenstein, 1989; S. Morrison and C. Winston, 1989; and myself, 1989, among many others.) Airlines typically defend any competitive advantage as stemming from the lower costs and better service that are said to be generated by hub-and-spoke route systems. Airline critics typically respond that airlines gain market power by dominating individual airports. Both views are at least plausible. Huband-spoke transportation networks reduce the number of round-trips necessary to carry a given number of passengers on a given set of itineraries, while increasing the number of passenger miles flown. If there are sufficient economies of scale in plane size, then the advantages of hubbing can overcome the disadvantage in passenger miles, resulting in lower total costs. By pooling passengers with different ultimate destinations, a hubbed system can also offer more frequent flights than would be economically feasible under a nonstop system. It also appears, however, that airlines gain other advantages from a large presence at an airport. Incumbent airlines are the major source of financing for many airports and therefore gain a large degree of bureaucratic control over airport operations. This control may enable them to block the entry or expansion of rivals. Airlines with a large presence in a given city also gain advantages from frequent flyer plans and nonlinear travel agent commission schedules (see, again, Levine and others). If the bureaucratic and marketing advantages of airport presence are sufficient to prevent most attempts at entry, then incumbents may gain the ability to exercise traditional "market power" by restricting output and driving up prices. This paper argues that both simple costreducing and naive market power stories are inappropriate for the airline industry. I present a model in which consumers are willing to pay a premium for the services of the dominant airline; this premium may be related to a number of factors, including flight frequency, frequent flier miles, and travel agent commission overrides. This model has the advantage of treating oligopoly product differentiation in an explicit way, of treating price as an endogenous variable, and of allowing for airport presence to affect both costs and demand.

In search of sustainability: Reaping long-term advantage from investments in information technology

Abstract: :We have raised executive management’s awareness, and expectations of the strategic role of information systems technology Teams of managers are commonly involved in workshops or planning processes designed to identify such applications Conceptual frameworks to assist in such “idea-generation” sessions are widely cited in the literature and used in practice Less well understood is the process used to evaluate the sustainability of proposed applications We present a framework for evaluating sustainability based on the competitor’s anticipated response time, differences among competitors, and the potential of the application to preempt competitive responses Such an analysis is proposed as an evaluation tool for intended strategic applications of information technology

Path analysis of the relationship between competitive strategy, information technology, and financial performance

Abstract: This study evaluates the impact of competitive strategy on information technology (it) and of it on organizational performance. In addition, the research model incorporates indirect performance eff...

Technology and Organizations

Abstract: Technology as equivoque - sense-making in new technologies, Karl E.Weick understanding technology and the individual in an organizational context, Paul S.Goodman, et al work groups - autonomy, technology and choice, Gerald I.Susman technology and structure - an organizational-level perspective, W.Richard Scott technology, management and competitive advantage, James G.March and Lee S.Sproull technology and organizations - a cross-national analysis, Leonard H.Lynn technology and organizations - an economic/institutional analysis, David C.Mowery a technological perspective on new forms of organizations, Raj Reddy technology and organizations - integration and opportunities, Lee S.Sproull and Paul S.Goodman.

New global strategies for competitive advantage

Abstract: Why do some nations win or lose a share of world trade? Michael Porter, author of the two most widely quoted books on strategic management, has just published a masterful new book, The Competitive Advantage of Nations, which offers a theory to explain the triumph of some nations in some markets.

Successful Supply‐Chain Management

Abstract: The supply chain is the flow of both information and material through a manufacturing company, from the supplier to the customer. Traditionally the flow of material has been considered only at an operational level, but this approach is no longer adequate. It is now essential for businesses to manage the supply chain in order to improve customer service, achieve a balance between costs and services, and thereby give a company a competitive advantage. Managers must work to integrate the supply chain – i.e. to ensure that all the functions and activities involved in the chain are working harmoniously together. To develop an integrated supply chain means managing material flow from three perspectives: strategic, tactical and operational. At each of these levels, the use of facilities, people, finance and systems must be co‐ordinated and harmonised as a whole. The article describes how this can be achieved in practice by working through three phases: (1) evaluation of the competitive environment; (2) diagnostic review of the supply chain; (3) development of the supply chain, which involves functional integration, internal integration and finally external integration. Companies which develop an integrated supply chain, with all that this involves, will benefit hugely in the marketplace. Those that do not will get left behind in the struggle for survival.

Competitive Strategies for Late Entry into a Market with a Dominant Brand

Abstract: This paper considers optimal positioning, advertising, and pricing strategies for a firm contemplating entry in a market dominated by an entrenched competitor. Drawing on behavioral research on consumer preference formation, we develop an individual-level model that reflects differing consumer responses to similar products offered by the dominant brand and later entrants-an effect we term asymmetric preferences. From the resulting aggregate market response model, we derive several competitive implications, notably 1 that preference asymmetry can make a differentiated late entry strategy optimal even if preferences would appear to dictate otherwise, and 2 that me-too strategies are not equilibrium late entry strategies. More generally, our analysis suggests that preference asymmetry can contribute to the persistent competitive advantage of dominant brands.

Problems and Developments in the Core Theory of International Business

Abstract: The established theory of international business is not without problems. It is necessary to specify the key relationships between internalisation and market structure and between internalisation and competitive advantage more carefully. This chapter attempts to clarify the former relationship by reference to the work of Hymer and the latter by contrasting the nature of internalisation decisions with those building short-run competitive advantage. Avenues of development of the theory include the integration of non-traditional concepts and the reintegration of areas of research which have become divorced from core international business theory.

An examination of factors for the strategic use of information systems in the healthcare industry

Abstract: The potential use of information systems technology (IST) as a competitive weapon has been of enormous interest to many academic scholars and practitioners. However, the importance of identifying factors that organizations must deal with in the process of achieving IST competitive advantages has received inadequate research attention. This article attempts to identify these important factors for the strategic use of IST by examining the multifaceted role of IST in the healthcare context. Three propositions are developed from (1) re-examining a variety of successful IST applications both within and outside healthcare organizations, (2) re-applying the integration concept from the literature, and (3) examining field experiences in the healthcare industry. These propositions should serve as a basis for future empirical investigations into IST strategic applications.

Creating the competitive organization of the 21st century: The boundaryless corporation

Abstract: In the 1980s many organizations gained competitive advantage through downsizing and financial restructuring. The 1990s confront us with the need to get back to basics. Large organizations are searching for a competitive advantage by being faster than their competitors in satisfying customer needs. These competitive organizations are capable of ongoing adaptation to environmental demands. In this article the authors speculate on the way these “self-renewing” organizations are organized, the managerial processes that enable them to capitalize on speed, and the characteristics of the leaders who manage them.