Showing papers on "Competitive advantage published in 1993"
TL;DR: In this article, the underlying economics of the resource-based view of competitive advantage is elucidated, and existing perspectives are integrated into a parsimonious model of resources and firm performance.
Abstract: This paper elucidates the underlying economics of the resource-based view of competitive advantage and integrates existing perspectives into a parsimonious model of resources and firm performance. The essence of this model is that four conditions underlie sustained competitive advantage, all of which must be met. These include superior resources (heterogeneity within an industry), ex post limits to competition, imperfect resource mobility, and ex ante limits to competition. In the concluding section, applications of the model for both single business strategy and corporate strategy are discussed.
10,149 citations
TL;DR: In this paper, a framework linking intangible resources to capabilities has been devised and is used as the basis of a new technique for identifying the relative contribution which the different intangible resources make to competitive advantage.
Abstract: This article is concerned with the role of intangible resources in business strategy. In particular it is concerned with identifying the intangible sources of sustainable competitive advantage. Sustainable competitive advantage results from the possession of relevant capability differentials. Regulatory and positional capabilities are concerned with intangible assets; functional and cultural capabilities are concerned with competencies. A framework linking intangible resources to capabilities has been devised and is used as the basis of a new technique for identifying the relative contribution which the different intangible resources make to competitive advantage. The results of the use of this technique in six case studies are reported.
2,054 citations
TL;DR: In this article, the authors present a review of the literature on sustainable competitive advantage (SCA) for services marketing and demonstrate that research in services marketing is characterized more by an operations management orientation than a strategic orientation.
Abstract: This paper presents a review of the literature to demonstrate that research in services marketing is characterized more by an operations management orientation than a strategic orientation. Diverse literature on sustainable competitive advantage (SCA) is synthesized and a conceptual model of drivers of SCA is proposed in this paper. Lessons from the manufacturing sector form the basis for a number of sources of SCA for services industries outlined in the paper. The distinctive characteristics of services are posited to moderate the effectiveness of the sources of competitive advantage.
1,058 citations
01 Jan 1993
TL;DR: In this paper, the authors present a review of the literature on sustainable competitive advantage (SCA) for services marketing and demonstrate that research in services marketing is characterized more by an operations management orientation than a strategic orientation.
Abstract: This paper presents a review of the literature to demonstrate that research in services marketing is characterized more by an operations management orientation than a strategic orientation. Diverse literature on sustainable competitive advantage (SCA) is synthesized and a conceptual model of drivers of SCA is proposed in this paper. Lessons from the manufacturing sector form the basis for a number of sources of SCA for services industries outlined in the paper. The distinctive characteristics of services are posited to moderate the effectiveness of the sources of competitive advantage.
1,025 citations
Journal Article•
TL;DR: Managers at competitive companies can get a bigger bang for their buck in five basic ways: by concentrating resources around strategic goals; by accumulating resources more efficiently; by complementing one kind of resource with another; by conserving resources whenever they can; and by recovering resources from the market-place as quickly as possible.
Abstract: Global competition is not just product versus product or company versus company. It is mind-set versus mind-set. Driven to understand the dynamics of competition, we have learned a lot about what makes one company more successful than another. But to find the root of competitiveness--to understand why some companies create new forms of competitive advantage while others watch and follow--we must look at strategic mind-sets. For many managers, "being strategic" means pursuing opportunities that fit the company's resources. This approach is not wrong, Gary Hamel and C.K. Prahalad contend, but it obscures an approach in which "stretch" supplements fit and being strategic means creating a chasm between ambition and resources. Toyota, CNN, British Airways, Sony, and others all displaced competitors with stronger reputations and deeper pockets. Their secret? In each case, the winner had greater ambition than its well-endowed rivals. Winners also find less resource-intensive ways of achieving their ambitious goals. This is where leverage complements the strategic allocation of resources. Managers at competitive companies can get a bigger bang for their buck in five basic ways: by concentrating resources around strategic goals; by accumulating resources more efficiently; by complementing one kind of resource with another; by conserving resources whenever they can; and by recovering resources from the market-place as quickly as possible. As recent competitive battles have demonstrated, abundant resources can't guarantee continued industry leadership.(ABSTRACT TRUNCATED AT 250 WORDS)
845 citations
TL;DR: In this article, the authors provide an in-depth analysis of the organizational principles and policy initiatives that appear to give industrial districts a competitive edge, comparing the experiences of the Italian industrial districts with those of other countries, namely Canada, Cyprus, Germany, Denmark and Spain.
Abstract: This book contains two basic questions: how do the experiences of the Italian industrial districts compare with those of other countries, namely Canada, Cyprus, Germany, Denmark and Spain?; and what are the policy interventions needed in order to sustain existing industrial districts and guide other regions considering pursuing a similar strategy in the interests of local economic regeneration? The book attempts to provide an in-depth analysis of the organizational principles and policy initiatives that appear to give industrial districts a competitive edge.
808 citations
Posted Content•
TL;DR: In the case of manufacturing firms, there may be more profound causes than competitive turmoil that explain a firm's survival chances as discussed by the authors, and these have to do with the evolution of technology in an industry.
Abstract: Why some firms die while others survive? Survival has long been recognized as a basic goal for a manufacturing firm. At least in the long term, survival should be related to various measures of performance, such as market share and profitability. Advocates of population ecology have argued that life chances of organizations are affected by population density at the time of founding. According to this argument, organizations founded during periods of intense competition will have persistently higher age-specific rates of mortality than those founded during periods with lower numbers of competitors. At least for the case of manufacturing firms, there may be more profound causes than competitive turmoil that explain a firm's survival chances. These have to do with the evolution of technology in an industry. Population density may only be a reflection of underlying driving forces based on technological change that determine the form and level of competition, the attractiveness of entry, and ultimately the structure of an industry.
768 citations
TL;DR: This paper examined the determinants of Japanese entry into the United States by focusing on firms of one country entering a single market, and they were able to separate the impact of a firm's strategy from that of the characteristics of the target industry or country.
Abstract: Multinational firms can enter a foreign market by taking over existing local firms acquisitions or by setting up new ventures greenfield investments. Surprisingly, there has been limited empirical work on this topic. This paper examines the determinants of this choice by looking at Japanese entries into the United States. By focusing on firms of one country entering a single market, we are able to separate the impact of a firm's strategy from that of the characteristics of the target industry or country.
This paper tests simultaneously a number of competing hypotheses. The results suggest that acquisitions are used by Japanese investors with weak competitive advantages, while investors with strong advantages find that greenfield investments are a more efficient way to transfer these advantages to the U.S. Acquisitions are also chosen to enter industries with either very high or very low growth rates, when entry is at a scale that is large relative to the parent, and when entry is into a different industry. The Japanese investor's previous experience of the U.S. market, its financial situation, and its status as a follower in an oligopolistic industry have no statistically significant impact on the entry mode. Neither do U.S. stock market conditions.
720 citations
TL;DR: Badaracco as mentioned in this paper argues that corporations enter into strategic alliances to capitalize on knowledge: migratory knowledge, often technical in nature, which can be transferred easily between people or organizations in a formula or product, and embedded knowledge, which defines how a particular company organizes itself to do business.
Abstract: Why do successful companies let down their corporate walls, exposing their organizations and strategies to competitors? The answer, according to Joseph Badaracco is that corporations enter into strategic alliances to capitalize on knowledge: migratory knowledge, often technical in nature, which can be transferred easily between people or organizations in a formula or product, and embedded knowledge, which defines how a particular company organizes itself to do business. In today's business environment companies need to utilize each type of knowledge to sustain their competitive advantage. The challenge for today's manager is to balance the opportunities offered by open boundaries and free flowing information against the need to protect the corporations's unique advantages. Managing strategic alliances effectively will determine corporate success in the years ahead.
716 citations
TL;DR: Two major approaches to examining the relationship between organizational configurations and performance are found in the strategic management literature as mentioned in this paper, rooted in the concept of strategies and their relationship to organizational performance.
Abstract: Two major approaches to examining the relationship between organizational configurations and performance are found in the strategic management literature. The first, rooted in the concept of strate...
608 citations
Journal Article•
Book•
01 Aug 1993
TL;DR: Shank and Govindarajan as discussed by the authors demonstrate how strategic cost management -an analytical framework which relates meaningful accounting information to a firm's business strategy - is changing accounting practices in leading companies.
Abstract: In this book, Shank and Govindarajan demonstrate how strategic cost management - an analytical framework which relates meaningful accounting information to a firm's business strategy - is changing accounting practices in leading companies. Using case studies, including Ciba-Geigy, Ford, Motorola and Texas Instruments, they show how the tools of strategic cost management - value chain analysis, strategic positioning analysis and cost driver analysis - provide a sustainable competitive advantage over companies whose cost systems are in disarray.
TL;DR: In this article, the authors compare alternative approaches to the theory of the firm and compare the two main approaches confronted are the contractual (Coasian) perspective and the competence (evolutionary) perspective, where the firm as a repository of tacit knowledge is neglected in the contractual perspectives, it occupies center stage in the competence perspective.
Abstract: The article compares alternative approaches to the theory of the firm. The two main approaches confronted are the contractual (Coasian) perspective and the competence (evolutionary) perspective. Whereas the firm as a repository of tacit knowledge is neglected in the contractual perspectives, it occupies center stage in the competence perspective. It is argued that the competence perspective is not only applicable an understanding of the sources of firms' competitive advantage, but may also be applied to the issues of the existence and the boundaries of the firm. This means that a distinct theory of the firm can be constructed on the basis of evolutionary theory.
TL;DR: The strategic importance of information technology is analysed in light of the specificity of small and medium-sized enterprises (SMEs) and planning approaches are outlined, focusing on how SMEs can attain a mastery of informationTechnology for competitive advantage.
TL;DR: In this article, a scenario where even superior manufacturing may no longer be a source of competitive advantage, but simply a ticket to the ball game is sketched, and the authors suggest that competences don't have to hurt each other; performance relative to the competition is what counts.
Abstract: Manufacturing strategy is increasingly recognized by academics as essential to achieving sustainable competitive advantage. It is important to distinguish clearly between internal competences and external measures of competitiveness; ensuring a proper link between the two is a critical factor for success. This article suggests that: competences don't have to hurt each other; performance relative to the competition is what counts; each product has to meet some minimum requirements to have a chance of selling; and these requirements are continually becoming tougher. The article sketches a scenario where even superior manufacturing may no longer be a source of competitive advantage, but simply a ticket to the ball game.
Journal Article•
TL;DR: In this article, a double diamond framework is developed to explain Canada's successful resource-based multinationals, foreign subsidiaries and access to the triad market of the United States through the Free Trade Agreement.
Abstract: * Porter's home-base diamond model of international competitiveness is seriously flawed when applied to a small, open, trading economy like Canada's. * Porter's framework needs to be adapted to explain Canada's successful resource-based multinationals, foreign subsidiaries and access to the triad market of the United States through the Free Trade Agreement. A new "double diamond" framework is developed to achieve this. Key words * Porter's single diamond model works for large triad economies but needs to be adapted for smaller countries like Canada. Introduction The influential Porter (1990) study on the determinants of international competitiveness suggests that the home country "diamond" is the source of competitive advantage for domestic firms. The competitive advantage of a firm depends upon one, or more, of the four key determinants of the nation's international competitiveness. The successful domestic firms build upon this home base and can then export or engage in outward foreign direct investment. In short, Porter's model states that a global firm needs to have a sustainable competitive advantage based on the successful utilization of components of its home country diamond. The thesis of this article is that Porter's diamond framework explains the success of U.S., Japanese and E.C.-based multinationals, i.e. the triad. However, Porter's model is not applicable to small, open, trading economies which are not parts of this triad. For example, Rugrnan and D'Cruz (1991) have demonstrated that Canada's international competitiveness is not explained by the Porter home country diamond. They show that substantial modifications of the Porter framework are required to analyze the nature of Canada's foreign-owned firms and institutional arrangements, such as the Canada-U.S. Free Trade Agreement. The latter arrangement suggest that the Canadian diamond need to be considered jointly with the U.S. diamond, i.e. that the Canadian managers needs to operate in this "double diamond" framework. Indeed, Rugman and D'Cruz propose that a "North American diamond" be used by Canadian managers and policy makers-in searching for useful answers to the question of how to improve Canada's international competitiveness. A similar insight emerges from the work of Cartwright (1991) in his assessment of the application of the Porter model in the New Zealand study. A team headed by Porter used the Porter single diamond theory as a benchmark for a study of the international competitiveness of New Zealand, see Crocombe, Enright and Porter (1991). In his critique, Cartwright demonstrates, using empirical judgemental impact scores, that a "double diamond" framework has much greater explanatory power in a New Zealand context than does Porter's home country diamond model Cartwright concludes that his results "cast serious doubt on the ability of the Porter diamond theory to account satisfactorily for the international competitiveness of land-based industries that must export a high proportion of their production" (Cartwright 1991, p. 7). In a related, but independent, development Cho (1991) has also adapted the Porter diamond in order to better explain the role of inward foreign direct investment into Korea. Cho extends Porter's six factor model into a nine factor model and tests it to explain Japanese FDI (that by Japanese sogo-shoshas) in Korea, in relation to the performance of Japanese sogo-Shoshas in Korea, whereas the methodology of Porter (1990) would require the use of the Japanese diamond, not the Korean. How, then, Should Porter's model be modified to explain the international competitiveness of small, open, trading nations such as Canada, New Zealand, and Korea? Here it is demonstrated that each country needs to set its own home-country diamond against the relevant "triad" diamond. In general, most Asia-Pacific nations will set theirs against Japan's. …
01 Aug 1993
TL;DR: In this article, the authors show that competitive advantage grows from firm-specific knowledge, and that theories relating strategy to knowledge require a typology, much as Polanyi distinguished tacit from objective knowledge.
Abstract: Competitive advantage grows from firm-specific knowledge. So theories relating strategy to knowledge require a typology, much as Polanyi distinguished tacit from objective knowledge. Ethnographic r...
Journal Article•
TL;DR: The authors argues that Porter's recent volume underestimates the significance of the globalization of production and markets for the competitive advantage of nations, because of the increasing interaction between the cross-border value added activities by multinational enterprises, which directly, or indirectly, impinge upon each of the components of the diamond of "national" competitive advantage.
Abstract: ■ This article argues that Michael Porter's recent volume underestimates the significance of the globalization of production and markets for the competitive advantage of nations. This is because of the increasing interaction between the cross-border value added activities by multinational enterprises, which directly, or indirectly, impinge upon each of the components of the diamond of "national" competitive advantage. ■ The article explores the nature and form of this networking and how recent technological developments and regional integration have increased the interdependence of economic activity between the leading industrial nations of the world.
Book•
01 Jun 1993
TL;DR: In this paper, economic contributions to business / competitive strategy and corporate strategy have been investigated in the context of game theory, evolutionary approaches to organizations and hybrid forms in the corporate governance.
Abstract: Part I Foundations 1 Markets and organizations 2 Markets 3 Organizations 4 Information 5 Game theory Part II Economic Approaches 6 Behavioural theory of the firm 7 Agency theory 8 Transaction cost economics 9 Economic contributions to business / competitive strategy 10 Economic contributions to corporate strategy 11 Evolutionary approaches to organizations 238 12 All in the family Part III Applications 13 Mergers and acquisitions 14 Hybrid forms 15 Corporate governance
TL;DR: In this paper, the importance of the supply base, current supplier performance and emerging supply base/sourcing strategies being used by leading firms to contribute to competitive advantage was determined. And significant opportunities exist to accelerate development of supplier capabilities and performance, identifying continuous improvement and breakthrough supply base and sourcing strategies to achieve supply base improvement.
Abstract: Competing in the mid‐to‐late 1990s will require world‐class firms to rely increasingly on their suppliers while at the same time developing more aggressive and executive supported purchasing, supply base and sourcing strategies, because suppliers′ performance is not meeting expectations of purchasers. This finding was one result of a research effort with over 100 different firms over a five‐year period to determine the importance of the supply base, current supplier performance and emerging supply base/sourcing strategies being used by leading firms to contribute to competitive advantage. It was further determined that significant opportunities exist to accelerate development of supplier capabilities and performance. Identifies and discusses continuous improvement and breakthrough supply base and sourcing strategies to achieve supply base improvement.
TL;DR: In this article, the authors investigated the relationship between stable cooperation and higher alliance performance in global strategic alliances and found that high performance is linked to specific elements of the alliance structure. And they applied insights from international business literature, suggesting that stable cooperation is linked with high performance.
Abstract: The dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business, Indeed, interfirm cooperation has become a crucial component of the pursuit of global competitive advantage. Yet such alliances are enormously complex to manage successfully, in part because of the opportunity and incentive to cheat, and profit at the partner's expense, that is an inescapable part of these relationships. Consequently, strategic alliances are frequently subject to high instability, poor performance, and premature dissolution. Thus, an important question arises: Is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies' incentives? This question is addressed empirically in the present paper using recent work in game theory, which suggests that high performance is linked to specific elements of the alliance structure. Further, this study applies insights from international business literature, suggesting th...
TL;DR: Effective internal technology transfer—the implementation of technical systems developed and disseminated to operational subunits within a single organization—depends not only upon the cost, but also upon the quality of the systems implemented.
Abstract: Effective internal technology transfer—the implementation of technical systems developed and disseminated to operational subunits within a single organization—depends not only upon the cost, qualit...
TL;DR: Two main approaches to re-engineering have emerged as discussed by the authors, Process Re-engineering and Business Re- Engineering, which offer the opportunity to rethink and streamline individual processes and provide an approach to rethinking and redesigning the entire business behind a more focused, competence based competitive strategy.
TL;DR: In this paper, the authors identify the core capabilities, or isolating mechanisms, that lie at the heart of a company's competitive advantage, and classify these dynamic core capabilities according to how fast they are duplicated.
Abstract: Through strategy, a company seeks to sustain its competitive advantage. Yet only recently has the study of strategy begun to examine how long a specific advantage can be sustained. Based on a study of sustainability patterns in a number of industries, this article shows how the competitive pressures associated with product imitation can be predicted by identifying the core capabilities, or isolating mechanisms, that lie at the heart of a company's advantage. A number of these dynamic core capabilities are classified according to how fast they are duplicated. The imitation of capabilities shapes many strategic decisions in companies, indeed the distinctive character of companies, and that by thinking in these terms managers enhance their company's cohesiveness and responsiveness as they pursue their strategic mission in global markets.
TL;DR: In this article, the status of 360-degree feedback in organizations is examined and how to optimally use feedback from multiple constituencies as a competitive advantage is discussed, including content, employee involvement, item type, format, relevance, and implementation.
Abstract: This article examines the status of 360-degree feedback in organizations. How to optimally use feedback from multiple constituencies as a competitive advantage is discussed. Differences between traditional performance appraisal and 360-degree feedback are elucidated. Elements of designing and implementing an effective 360-degree feedback program are explored: content, employee involvement, item type, format, relevance, implementation, using results for evaluation and/or development, including managers' self-assessment, and the form and content of the feedback. A research agenda on 360-degree programs is charted. © 1993 by John Wiley & Sons, Inc.
Book•
01 Jan 1993
TL;DR: In this paper, the authors describe how to create an organization with high levels of employee involvement and new roles for managers, and how all organizational structures can be aligned to move information, power, knowledge, and rewards downward to maximize performance throughout the organization.
Abstract: In an era of accelerating change in the workplace, many organizational designs and management practices - created to work in a stable, predictable world - have rapidly become outmoded. And while in the past companies pursued new competitive advantages through initiatives in productivity, quality, and customer service, there is a growing belief that, in the future, organization design will be the basis for gaining competitive advantage. This book, based on more than ten years of research done at the Center for Effective Organizations at the University of Southern California, explores key issues of organization design and identifies practical new approaches for managing complex organizations to stay competitive in a changing global marketplace. The authors describe how to create an organization with high levels of employee involvement and new roles for managers. They detail the use of new organizational forms, including knowledge work and managerial teams, structuring human resource systems around skill levels and creating such new types of organizations as distributed staffs and virtual networks. And they explain how all organizational structures can be aligned to move information, power, knowledge, and rewards downward to maximize performance throughout the organization.
TL;DR: This paper presents a framework for senior executives to use in order to lead the deployment of information technology (I/T) without having to know how it is managed and to ensure the fusion of business processes, people, and technology.
Abstract: When every leading firm in an industry has access to the same information technology resource, the management difference determines competitive advantage or disadvantage. The management challenge is to make sure that business processes, people, and technology are meshed, instead of being dealt with as separate elements in planning and implementation. This paper presents a framework for senior executives to use in order to lead the deployment of information technology (I/T) without having to know how it is managed and to ensure the fusion of business processes, people, and technology. The "fusion map" approach that focuses on the steps that precede and enable strategy, has been applied in a number of companies. Factors are identified that make I/T a frequent destabilizer of basic logistics in an industry.
Book•
01 Dec 1993
TL;DR: In this paper, Lovelock demonstrates how organizations consistently profit by putting customers first, and lays out a proven strategy for building an entire company around customer-is-king satisfaction.
Abstract: In this text, Christopher Lovelock demonstrates how organizations consistently profit by putting customers first, and lays out a proven strategy for building an entire company around customer-is-king satisfaction. Based on an in-depth understanding of customer needs, the book's nucleus is its five-point "product plus" services: information - how to transmit instructions and advice, take reservations and provide progress reports; hospitality - how to welcome customers with courteous greetings, comfortable waiting areas and readily available facilities; caretaking - how customers appreciate such extra touches as convenient parking, secure coatrooms and personal care of their valuables; exceptions - how companies can impress everyone with service for the handicapped, those with special dietary needs, and other "exceptional" customers; and payment - how to avoid the "one last chance to disappoint". With these principles in place, Lovelock illustrates how an organization can harness the power of modern technology to improve service quality; leverage employee skills; speed service delivery; reduce costs; and increase productivity. He goes behind the scenes of well-known service companies to see what makes them tick, details the best strategies of international companies, and flowcharts the customer's experience to see how buying decisions and product loyalty evolve.
Book•
01 Jan 1993TL;DR: In this paper, the authors present challenges for teaching and research in International Business: 1 The study of International Business - A Plea for A More Interdisciplinary Approach Part 2 Challenges for Theorizing about MNEs and MNE activity: 2 Micro and Macro Organizational Aspects of MNE and NE activity 3 The Changing Dynamics of International Production 4 Global Strategy and the Theory of International production 5 The Competitive Advantage of Nations Part 3 Challenges to Established Patterns of NE Activity: 6 Japanese NEs in Europe and the US - Some Comparisons and Contrasts 7 Transatlantic Investment
Abstract: Part 1 Challenges for Teaching and Research in International Business: 1 The Study of International Business - A Plea for A More Interdisciplinary Approach Part 2 Challenges for Theorizing about MNEs and MNE Activity: 2 Micro and Macro Organizational Aspects of MNEs and MNE Activity 3 The Changing Dynamics of International Production 4 Global Strategy and the Theory of International Production 5 The Competitive Advantage of Nations Part 3 Challenges to Established Patterns of MNE Activity: 6 Japanese MNEs in Europe and the US - Some Comparisons and Contrasts 7 Transatlantic Investment Flows 8 Technological Strategic Alliances 9 Prospects for Investment in Central and Eastern Europe 10 The Globalization of Service Activity 11 International Direct Investment Patterns in the 1990s Part 4 Challenges to National and Regional Government Policies: 12 Governments, Hierarchies and Markets - Towards a New Balance 13 Governments and Multinational Enterprises - From Confrontation to Co-operation 14 Political Economy of International Business 15 Multinational Investment in the EC
TL;DR: It is suggested that firms that successfully integrate an information technology (I/T) strategy with their business strategies do so by focusing on the information itself, rather than on technology, as the real carrier of value and source of competitive advantage.
Abstract: This paper suggests that firms that successfully integrate an information technology (I/T) strategy with their business strategies do so by focusing on the information itself, rather than on technology, as the real carrier of value and source of competitive advantage. A primary mechanism by which a firm becomes an information-intensive firm is the implementation of a procedure for measuring the value of its information assets V(I). This paper presents a methodology for measuring the value of information in the firm. This paper describes the application of that methodology in an actual case study and discusses some consequences of being able to compare organizations with respect to their relative levels of information intensity.