Showing papers on "Competitive advantage published in 1998"

Competitive advantage: creating and sustaining superior performance

Abstract: COMPETITIVE ADVANTAGE introduces a whole new way of understanding what a firm does. Porter's groundbreaking concept of the value chain disaggregates a company into 'activities', or the discrete functions or processes that represent the elemental building blocks of competitive advantage. Now an essential part of international business thinking, COMPETITIVE ADVANTAGE takes strategy from broad vision to an internally consistent configuration of activities. Its powerful framework provides the tools to understand the drivers of cost and a company's relative cost position. Porter's value chain enables managers to isolate the underlying sources of buyer value that will command a premium price, and the reasons why one product or service substitutes for another. He shows how competitive advantage lies not only in activities themselves but in the way activities relate to each other, to supplier activities, and to customer activities. That the phrases 'competitive advantage' and 'sustainable competitive advantage' have become commonplace is testimony to the power of Porter's ideas. COMPETITIVE ADVANTAGE has guided countless companies, business school students, and scholars in understanding the roots of competition. Porter's work captures the extraordinary complexity of competition in a way that makes strategy both concrete and actionable.

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

Abstract: In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

Clusters and the new economics of competition.

Abstract: Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time. But in practice, Michael Porter demonstrates, location remains central to competition. Today's economic map of the world is characterized by what Porter calls clusters: critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field. The most famous example are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate. Porter challenges the conventional wisdom about how companies should be configured, how institutions such as universities can contribute to competitive success, and how governments can promote economic development and prosperity.

Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination

Abstract: Research on market orientation and organizational learning addresses how organizations adapt to their environments and develop competitive advantage. A significant void exists in current models of market orientation because none of the frameworks incorporates constructs related to innovation. The authors present a conceptual framework for incorporating constructs that pertain to innovation in market orientation research. Some of the critical relationships in this conceptual framework are tested among a sample of 9648 employees of 56 organizations in a large agency of the U.S. federal government. The results indicate that higher levels of innovativeness in the firms' culture are associated with a greater capacity for adaptation and innovation (number of innovations successfully implemented). In addition, higher levels of innovativeness are associated with cultures that emphasize learning, development, and participative decision making. The authors make recommendations for incorporating constructs related to innovation into research on market orientation and organziational learning.

Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination:

Abstract: Research on market orientation and organizational learning addresses how organizations adapt to their environments and develop competitive advantage. A significant void exists in current models of ...

Contemporary Strategy Analysis

Abstract: Preface. PART I INTRODUCTION. 1 The Concept of Strategy. Introduction and Objectives. The Role of Strategy in Success. The Basic Framework for Strategy Analysis. A Brief History of Business Strategy. Strategic Management Today. The Role of Analysis in Strategy Formulation. Summary. Self-Study Questions. Notes. PART II THE TOOLS OF STRATEGY ANALYSIS. 2 Goals, Values and Performance. Introduction and Objectives. Strategy as a Quest for Value. Strategy and Real Options. Putting Performance Analysis into Practice. Beyond Profit: Values and Social Responsibility. Summary. Self-Study Questions. Notes. 3 Industry Analysis: The Fundamentals. Introduction and Objectives. From Environmental Analysis to Industry Analysis. The Determinants of Industry Profit: Demand and Competition. Analyzing Industry Attractiveness. Applying Industry Analysis. Defining Industries: Where to Draw the Boundaries. From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors. Summary. Self-Study Questions. Notes. 4 Further Topics in Industry and Competitive Analysis. Introduction and Objectives. Extending the Five Forces Framework. The Contribution of Game Theory. Competitor Analysis. Segmentation Analysis. Strategic Groups. Summary. Self-Study Questions. Notes. 5 Analyzing Resources and Capabilities. Introduction and Objectives. The Role of Resources and Capabilities in Strategy Formulation. The Resources of the Firm. Organizational Capabilities. Appraising Resources and Capabilities. Putting Resource and Capability Analysis to Work: A Practical Guide. Summary. Self-Study Questions. Notes. 6 Developing Resources and Capabilities. Introduction and Objectives. Developing Resources. The Challenge of Capability Development. Approaches to Capability Development. Knowledge Management and the Knowledge-based View. Designing Knowledge Management Systems. Summary. Self-Study Questions. Notes. 7 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation. Introduction and Objectives. The Evolution of the Corporation. The Organizational Problem: Reconciling Specialization with Coordination and Cooperation. Hierarchy in Organizational Design. Applying the Principles of Organizational Design. Organizing on the Basis of Coordination Intensity. Alternative Structural Forms. Management Systems for Coordination and Control. Summary. Self-Study Questions. Notes. PART III THE ANALYSIS OF COMPETITIVE ADVANTAGE. 8 The Nature and Sources of Competitive Advantage. Introduction and Objectives. The Emergence of Competitive Advantage. Sustaining Competitive Advantage. Competitive Advantage in Different Market Settings. Types of Competitive Advantage: Cost and Differentiation. Summary. Self-Study Questions. Notes. 9 Cost Advantage. Introduction and Objectives. Strategy and Cost Advantage. The Sources of Cost Advantage. Using the Value Chain to Analyze Costs. Summary. Self-Study Questions. Notes. 10 Differentiation Advantage. Introduction and Objectives. The Nature of Differentiation and Differentiation Advantage. Analyzing Differentiation: The Demand Side. Analyzing Differentiation: The Supply Side. Bringing It All Together: The Value Chain in Differentiation Analysis. Summary. Self-Study Questions. Notes. PART IV BUSINESS STRATEGIES IN DIFFERENT INDUSTRY CONTEXTS. 11 Industry Evolution and Strategic Change. Introduction and Objectives. The Industry Life Cycle. Structure, Competition and Success Factors over the Life Cycle. Organizational Adaptation and Change. Summary. Self-Study Questions. Notes. 12 Technology-based Industries and the Management of Innovation. Introduction and Objectives. Competitive Advantage in Technology-intensive Industries. Strategies to Exploit Innovation: How and When to Enter. Competing for Standards. Implementing Technology Strategies: Creating the Conditions for Innovation. Summary. Self-Study Questions. Notes. 13 Competitive Advantage in Mature Industries. Introduction and Objectives. Competitive Advantage in Mature Industries. Strategy Implementation in Mature Industries: Structure, Systems and Style. Strategies for Declining Industries. Summary. Self-Study Questions. Notes. PART V CORPORATE STRATEGY. 14 Vertical Integration and the Scope of the Firm. Introduction and Objectives. Transaction Costs and the Scope of the Firm. The Costs and Benefits of Vertical Integration. Designing Vertical Relationships. Summary. Self-Study Questions. Notes. 15 Global Strategies and the Multinational Corporation. Introduction and Objectives. Implications of International Competition for Industry Analysis. Analyzing Competitive Advantage in an International Context. Applying the Framework: International Location of Production. Applying the Framework: Foreign Entry Strategies. Multinational Strategies: Global Integration versus National Differentiation. Strategy and Organization within the Multinational Corporation. Summary. Self-Study Questions. Notes. 16 Diversification Strategy. Introduction and Objectives. Trends in Diversification over Time. Motives for Diversification. Competitive Advantage from Diversification. Diversification and Performance. Summary. Self-Study Questions. Appendix: Does Diversification Confer Market Power? Notes. 17 Implementing Corporate Strategy: Management of the Multibusiness Firm. Introduction and Objectives. Governance and the Structure of the Multibusiness Corporation. The Role of Corporate Management. Managing the Corporate Portfolio. Managing Individual Businesses. Managing Linkages between Businesses. Managing Change in the Multibusiness Corporation. External Strategy: Mergers and Acquisitions. Summary. Self-Study Questions. Notes. 18 Current Trends in Strategic Management. Introduction. The New External Environment of Business. Managing in an Economic Crisis. New Directions in Strategic Thinking. Redesigning the Organization. New Modes of Leadership. Summary. Notes. Index.

Capturing Value from Knowledge Assets: The New Economy, Markets for Know-How, and Intangible Assets

Abstract: The increasing liberalization of markets coupled with the creation of new markets for intermediate products is stripping firm-level competitive advantage back to its fundamental core: difficult to create and difficult to imitate intangible assets. This article explores these developments and elucidates implications for the management of intellectual capital inside firms.

On becoming a strategic partner: The role of human resources in gaining competitive advantage

Abstract: Although managers cite human resources as a firm's most important asset, many organizational decisions do not reflect this belief. This article uses the value, rareness, imitability, and organization (VRIO) framework to examine the role that the human resource (HR) function plays in developing a sustainable competitive advantage. Why some popularly cited sources of sustainable competitive advantage are not, and what aspects of a firm's human resources can provide a source of sustainable competitive advantage are discussed. The role of the HR executive as a strategic partner in developing and maintaining competitive advantage within the firm is also examined. © 1998 John Wiley & Sons, Inc.

Configuring value for competitive advantage: on chains, shops, and networks

Abstract: Building on Thompson’s (1967) typology of long-linked, intensive, and mediating technologies, this paper explores the idea that the value chain, the value shop, and the value network are three distinct generic value configuration models required to understand and analyze firm-level value creation logic across a broad range of industries and firms. While the long-linked technology delivers value by transforming inputs into products, the intensive technology delivers value by resolving unique customer problems, and the mediating technology delivers value by enabling direct and indirect exchanges between customers. With the identification of alternative value creation technologies, value chain analysis is both sharpened and generalized into what we propose as a value configuration analysis approach to the diagnosis of competitive advantage. With the long-linked technology and the corresponding value chain configuration model as benchmark, the paper reviews the distinctive logic and develops models of the value shop and the value network in terms of primary activity categories, drivers of cost and value, and strategic positioning options. © 1998 John Wiley & Sons, Ltd.

An empirical investigation into supply chain management: a perspective on partnerships

Abstract: States that we have witnessed, over the last several years, a profound change in understanding the dynamics of competitive advantage. Managers now acknowledge that a firm’s success is tied, in part, to the strength of its weakest supply chain partner. This paper develops the concept of supply chain management and argues that only through close collaborative linkages through the entire supply chain, can one fully achieve the benefits of cost reduction and revenue enhancing behaviors. Data are presented that look at a range of supply chain management practices and processes. By examining differences in practices and processes between buyers and sellers, along with the supply chain, attempts to understand better the challenges facing managers who espouse supply chain management. Also proposes a change in mind set for the traditional procurement manager and present insights for him/her to adapt to the requirements of the new competition.

Navigating in the new competitive landscape: Building strategic flexibility and competitive advantage in the 21st century

Abstract: Executive Overview A new competitive landscape is developing largely based on the technological revolution and increasing globalization. The strategic discontinuities encountered by firms are transforming the nature of competition. To navigate effectively in this new competitive landscape, to build and maintain competitive advantage, requires a new type of organization. Success in the 21st century organization will depend first on building strategic flexibility. To develop strategic flexibility and competitive advantage, requires exercising strategic leadership, building dynamic core competences, focusing and developing human capital, effectively using new manufacturing and information technologies, employing valuable strategies (exploiting global markets and cooperative strategies) and implementing new organization structures and culture (horizontal organization, learning and innovative culture, managing firm as bundles of assets). Thus, the new competitive landscape will require new types of organizatio...

Knowledge Assets: Securing Competitive Advantage in the Information Economy

Abstract: Preface 1. Introduction 2. The Information Perspective 3. The Information Space (I-Space) 4. The Paradox of Value 5. Neoclassical versus Schumpeterian Orientation to Learning 6. Culture as a Knowledge Asset 7. Products, Technologies, and Organizations in the Social Learning Cycle 8. Competence and Intent 9. IT and its Impact 10. Applying the I-Space 11. Recapitulation and Conclusion

The Utilization of Contingent Work, Knowledge Creation, and Competitive Advantage

Abstract: Contingent work is an increasingly integral part of the world of work, affecting firms' abilities to accumulate knowledge, create value, and establish competitive advantage. Although its growing use reflects a belief that firms can reduce cost structures and increase strategic flexibility, we suggest that in certain contexts, such as dynamic environments, contingent work can be a means of accumulating and creating valuable knowledge. We also discuss implications for other forms of permeable organizational boundaries.

The myth of the powerless state

Abstract: Conventional wisdom argues that the integration of the world economy is making national governments less powerful, but Linda Weiss disagrees. In an era when global society and the transnational market are trendy concepts, she suggests that state capacities for domestic transformative strategies provide a competitive advantage. Some of the most successful economies rely on state-informed and state-embedded institutions for governing the economy. In fact, she contends, the strength of external economic pressures is largely determined domestically, and the effect of such pressures varies with the strength of domestic institutions. Weiss analyzes the sources and varieties of state capacity for governing industrial transformation in contemporary cases: the unraveling of Sweden's distributive model of adjustment, the evolution of developmental states in Northeast Asia, and the parallel strengths of the German and Japanese systems of industrial coordination. Her comparative perspective allows her to show how different types of state capacity affect industrial vitality and domestic adjustment to global forces. As economic integration proceeds, she concludes, state capabilities will matter more rather than less in fostering social well-being and the creation of wealth.

Winning through Innovation: A Practical Guide to Leading Organizational Change and Renewal

Abstract: Winning Through Innovation: A Practical Guide to Leading Organizational Change and Renewal Tushman, Michael L. and O'Reilly, Charles A., 256 pp., Cambridge, MA: Harvard Business School Press, 1997. Reviewed by Subodh P. Kulkarni, Assistant Professor in School of Business at Howard University, Washington, D.C. Professors Tushman and O'Reilly are well known for their research on innovation and organizational culture. In this book, the authors address a fundamental and interesting issue underlying organizational change and innovation: that of how firms can achieve a balance between stability and change. Businesses are not likely to prosper or survive in the long run without this balance. One of the book's key premises is that short-term success may constrain a firm's ability to change. Short term successes often occur in larger, older, more structured organizations, the source of structural and cultural inertia, which yields success in stable environments and failure when environments change. Therefore, a company's culture holds the key to success (or failure) in the long run. To create and sustain a competitive edge in the long run, companies must learn how to manage incremental and revolutionary change. The key, according to the authors, is to develop an "ambidextrous organization." Tushman and O'Reilly define ambidextrous organizations as those having internally consistent structures and an internal operating culture that provides for excelling today, while also planning for the future. The ambidextrous organizations are, thus, engaged in a balancing act between the management of incremental and revolutionary technologies. Further, these organizations have very different cultures within a company (or even a business unit, for that matter). Vision is vital to ambidextrous organizations, often displaying one vision that hosts multiple cultures in the unit. Of course, a firm can have multiple cultures under one roof by spinning off different business units and managing them independently. This is unacceptable to the authors. It is important to manage them as a whole, or as a system. The thing that holds the system components together is the overarching vision for the technology firm. That is why the book emphasizes strategic intent or competitive vision; because without a common, overarching purpose and set of values, the ambidextrous company just does not hold together. So it is not only different cultures, but different structures, systems, rewards, and competencies that need to be managed together. Drawing on their extensive research, consulting practice, as well as the experiences of managers from several "ambidextrous companies," the authors develop a model that can be used by executives to understand the dynamics of change necessary for long-term success. Toward this end, the book provides several tools for identifying and diagnosing the causes of performance gaps and for developing action plans to attain, and maintain, industry leadership. The book is divided into nine chapters. Chapter 1 is introductory, and it outlines the concepts underlying the authors' model. Chapter 2 highlights the significance of the concepts introduced earlier in the context of global change and innovation. Chapters 3 through 6 focus on the building of capabilities, competencies, and cultures that can generate a sustainable competitive advantage. Chapter 4 develops a model that highlights the congruence among an organization's strategies and four distinct factors: critical tasks, culture, structure, and people. A lack of congruence often results in performance gaps. Chapter 5 outlines how organizational culture-the selecting, socializing, and rewarding of workers consistent with the company's goals-promotes this congruence. It also illustrates how to assesses an organization's culture. Chapters 7 and 8 stand out in particular because in these chapters the authors introduce techniques for building an ambidextrous organization. …

Can guanxi be a source of sustained competitive advantage for doing business in China

Abstract: Executive Overview Guanxi means good connections. Although guanxi is often said to be the source of sustained competitive advantage for foreign companies doing business in China, there is little theoretical basis for this view. What is known is that guanxi has to be valuable, rare, and imperfectly imitable before it can lead to a sustained advantage. Even if a certain advantage is gained, it can be difficult to sustain, because guanxi can be disrupted by something as simple as staff mobility. By suggesting ways for companies to protect their guanxi, it is hoped that this important aspect of Chinese management may be made more understandable to westerners and its use by western managers enhanced and encouraged.

Paradox in Project-Based Enterprise: The Case of Film Making

Abstract: The creation of temporary enterprises for project-based work has become an increasingly salient feature of the new economy These project-based enterprises challenge several tenets of strategic management theory Film making has a long tradition of project-based organizing This article presents an intensive case study of a big-budget motion picture project which provides the context for identifying some paradoxical attributes of project-based enterprises Each of the paradoxes challenges strategic management theory assumptions of a relatively permanent firm as the locus of learning, knowledge transfer, and competitive advantage Findings from the film case suggest the importance of human and social capital that is embodied in individual free-agent careers and mobilized within communities of professional and industry practice

Business marketing: understand what customers value.

Abstract: How do you define the value of your market offering? Can you measure it? Few suppliers in business markets are able to answer those questions, and yet the ability to pinpoint the value of a product or service for one's customers has never been more important. By creating and using what the authors call customer value models, suppliers are able to figure out exactly what their offerings are worth to customers. Field value assessments--the most commonly used method for building customer value models--call for suppliers to gather data about their customers firsthand whenever possible. Through these assessments, a supplier can build a value model for an individual customer or for a market segment, drawing on data gathered form several customers in that segment. Suppliers can use customer value models to create competitive advantage in several ways. First, they can capitalize on the inevitable variation in customers' requirements by providing flexible market offerings. Second, they can use value models to demonstrate how a new product or service they are offering will provide greater value. Third, they can use their knowledge of how their market offerings specifically deliver value to craft persuasive value propositions. And fourth, they can use value models to provide evidence to customers of their accomplishments. Doing business based on value delivered gives companies the means to get an equitable return for their efforts. Once suppliers truly understand value, they will be able to realize the benefits of measuring and monitoring it for their customers.

Performance Implications of Incorporating Natural Environmental Issues into the Strategic Planning Process: An Empirical Assessment

Abstract: This paper explores the ability of firms to integrate a critical strategic issue, the natural environment, into the strategic planning process within the natural resource-based perspective. Using survey data collected from a wide variety of firms and industries based in the United States, we empirically examined the antecedents and effects of integrating the natural environment into the formal planning process. These data were analysed using structural equation modelling with the LISREL technique. Overall, our data provided strong support for the hypothesized relationships. Specifically, we found that the level of integration of environmental management concerns in the strategic planning process was positively related to financial and environmental performance. Furthermore, we found that the greater the functional coverage and the more resources provided to environmental issues, the greater the integration of environmental issues in the planning process. These results suggest that concern for environmental issues may yield competitive advantages in the marketplace as the natural resource-based perspective suggests

Corporate Entrepreneurship, Knowledge, and Competence Development

Abstract: The literature highlights the importance of corporate entrepreneurship (CE) for improving a company's market and financial performance. This paper extends the literature by focusing on the knowledge-creation processes within a firm's formal and informal CE activities. This multifaceted knowledge, which encompasses organizational, technical, and social dimensions, is developed by individuals or groups and diffused throughout the organization. Whether radical or incremental, this knowledge can generate new skills, which a company can then use to reconfigure the sources of its competitive advantage. This paper also discusses the role of intrapreneurs and CE champions, particularly in the creation and use of social capital, in the development of dynamic competencies.

Purchasing and Supply Management: Trends and Changes Throughout the 1990s

Abstract: Understanding the changes and trends affecting purchasing requires replacing anecdotal evidence with research-based observations. Using data collected annually from leading firms worldwide, this article details the real and projected changes and trends that have affected and will continue to affect purchasing and sourcing professionals. These changes and trends appear within seven areas: (1) performance improvement requirements, (2) supplier and purchasing/sourcing importance, (3) organization, (4) systems development, (5) performance measurement, (6) supply base management, and (7) purchasing responsibilities and activities. A lack of awareness concerning these trends by purchasing professionals limits their ability to anticipate change and respond in a way that will create competitive advantage for their organization.

Mail Versus Mall: a Strategic Analysis of Competition Between Direct Marketers and Conventional Retailers

Abstract: Consumers now purchase several offerings from direct sellers, including catalog and Internet marketers. These direct channels exist in parallel with the conventional retail stores. The availability of multiple channels has significant implications for the performance of consumer markets. The literature in marketing and economics has, however, been dominated by a focus on the conventional retail sector. This paper is an effort toward modeling competition in the multiple-channel environment from a strategic viewpoint. At the outset, a parsimonious model that accommodates the following consumer and market characteristics is introduced. First, the relative attractiveness of retail shopping varies across consumers. Second, the fit with the direct channel varies across product categories. Third, the strength of existing retail presence in local markets moderates competition. Fourth, in contrast with the fixed location of the retail store that anchors its localized market power, the location of the direct marketer is irrelevant to the competitive outcome. The model is first applied in a setting where consumers have complete knowledge of product availability and prices in all channels. In the resulting equilibrium, the direct marketer acts as a competitive wedge between retail stores. The direct presence is so strong that each retailer competes against the remotely located direct marketer, rather than against neighboring retailers. This outcome has implications for the marketing mix of retailers, which has traditionally been tuned to attract consumers choosing between retail stores. In the context of market entry, conditions under which a direct channel can access a local market in retail entry equilibrium are derived. Our analysis suggests that the traditional focus on retail entry equilibria may not yield informative or relevant findings when direct channels are a strong presence. Next, the role of information in multiple-channel markets is modeled. This issue is particularly relevant in the context of direct marketing where the seller can typically control the level of information in the marketplace, sometimes on a customer-by-customer basis e.g., by deciding on the mailing list for a catalog campaign. When a certain fraction of consumers does not receive information from the direct marketer, the retailers compete with each other for that fraction of the market. The retailer's marketing mix has to be tuned, in this case, to jointly address direct and neighboring retail competition. The level of information disseminated by the direct marketer is shown to have strategic implications, and the use of market coverage as a lever to control competition is described. Even with zero information costs, providing information to all consumers may not be optimal under some circumstances. In particular, when the product is not well adapted to the direct channel, the level of market information about the direct option should ideally be lowered. The only way to compete with retailers on a larger scale with a poorly adapted product is by lowering direct prices, which lowers profits. Lowering market information levels and allowing retailers to compete more with each other facilitates a higher equilibrium retail price. In turn, this allows a higher direct price to be charged and improves overall direct profit. On the other hand, when the product is well adapted, increasing direct market presence and engaging in greater competition with the retail sector yields higher returns. The finding that high market coverage may depress profits raises some issues for further exploration. First, implementing the optimal coverage is straightforward when the seller controls the information mechanism, as in the case of catalog marketing. The Internet, in contrast, is an efficient mechanism to transmit information, but does not provide the sellers with such control over the level of market information. A key reason is that the initiative to gather information on the Internet lies largely with consumers. The design and implementation of mechanisms to control aggregate information levels in electronic markets can, therefore, be an important theme for research and managerial interest. Second, direct marketers have traditionally relied on the statistical analysis of customer records to decide on contact policies. The analysis in this paper reveals that these policies can have significant strategic implications as well. Research that integrates the statistical and strategic aspects could make a valuable contribution. The paper concludes with a discussion of issues for future research in multiple-channel markets, including avenues to model competition in settings with multiple direct marketers.

Knowledge-intensive business services: Users, carriers and sources of innovation

Abstract: It has now been recognised that services play a vital role in advanced industrial economies In most European Union (EU) member states service activities now provide around two-thirds of all jobs and Gross Domestic Product (GDP) and even higher proportion of total firms More particularly services have provided the bulk of new jobs in the European economy and in a number of strategically important service sectors the EU has established a competitive advantage over its major trading partners, including the US and Japan The contribution of services to technological innovation has also long been undervalued; service industries were seen as passive consumers of new technology, providing little or no input to innovation generation and diffusion This major study by two EIMS consultant teams, from PREST in the UK and TNO from the Netherlands and mentored by Dr Jeremy Howells of the University of Cambridge, seek to alter these outdated views of service innovation by focusing on a key service cluster involved in technological innovation, namely Knowledge-Intensive Business Services (KIBS)

Firm and industry effects within strategic management: an empirical examination

Abstract: This study brings out the complementarities between resource-based and industrial organization schools within strategic management through an empirical examination of firm and industry effects. A variance component analysis of 264 single-business companies from 69 industries using 5- and 15-year periods suggests that firm effects are more important than industry effects on firm performance, but not on core strategies such as technology and marketing. The findings also point to the need to study core strategies at lower levels of aggregation to understand the sources of competitive advantage. © 1998 John Wiley & Sons, Ltd.

Competitive advantage : creating and sustaining superior performance : with a new introduction

Abstract: Contents Introduction Preface Chapter 1 Competitive Strategy: The Core Concepts THE STRUCTURAL ANALYSIS OF INDUSTRIES Industry Structure and Buyer Needs Industry Structure and the Supply/Demand Balance GENERIC COMPETITIVE STRATEGIES Cost Leadership Differentiation Focus Stuck in the Middle Pursuit of More Than One Generic Strategy Sustainability Generic Strategies and Industry Evolution Generic Strategies and Organizational Structure Generic Strategies and the Strategic Planning Process OVERVIEW OF THIS BOOK PART I PRINCIPLES OF COMPETITIVE ADVANTAGE Chapter 2 The Value Chain and Competitive Advantage THE VALUE CHAIN Identifying Value Activities Defining the Value Chain Linkages within The Value Chain Vertical Linkages The Buyer's Value Chain COMPETITIVE SCOPE AND THE VALUE CHAIN Segment Scope Vertical Scope Geographic Scope Industry Scope Coalitions and Scope Competitive Scope and Business Definition The Value Chain and Industry Structure THE VALUE CHAIN AND ORGANIZATIONAL STRUCTURE Chapter 3 Cost Advantage THE VALUE CHAIN AND COST ANALYSIS Defining the Value Chain for Cost Analysis Assigning Costs and Assets First Cut Analysis of Costs COST BEHAVIOR Cost Drivers The Cost of Purchased Inputs Segment Cost Behavior Cost Dynamics COST ADVANTAGE Determining the Relative Cost of Competitors Gaining Cost Advantage Sustainability of Cost Advantage Implementation and Cost Advantage Pitfalls in Cost Leadership Strategies STEPS IN STRATEGIC COST ANALYSIS Chapter 4 Differentiation SOURCES OF DIFFERENTIATION Differentiation and The Value Chain Drivers of Uniqueness THE COST OF DIFFERENTIATION BUYER VALUE AND DIFFERENTIATION Buyer Value The Value Chain and Buyer Value Lowering Buyer Cost Raising Buyer Performance Buyer Perception of Value Buyer Value and the Real Buyer Buyer Purchase Criteria Identifying Purchase Criteria DIFFERENTIATION STRATEGY Routes to Differentiation The Sustainability of Differentiation Pitfalls in Differentiation STEPS IN DIFFERENTIATION Chapter 5 Technology and Competitive Advantage TECHNOLOGY AND COMPETITION Technology and The Value Chain Technology and Competitive Advantage Technology and Industry Structure TECHNOLOGY STRATEGY The Choice of Technologies to Develop Technological Leadership or Followership Licensing of Technology TECHNOLOGICAL EVOLUTION Continuous Versus Discontinuous Technological Evolution Forecasting Technological Evolution FORMULATING TECHNOLOGICAL STRATEGY Chapter 6 Competitor Selection THE STRATEGIC BENEFITS OF COMPETITORS Increasing Competitive Advantage Improving Current Industry Structure Aiding Market Development Deterring Entry WHAT MAKES A "GOOD" COMPETITOR? Tests of a Good Competitor "Good" Market Leaders Diagnosing Good Competitors INFLUENCING THE PATTERN OF COMPETITORS Damaging Good Competitors in Battling Bad Ones Changing Bad Competitors into Good Ones THE OPTIMAL MARKET CONFIGURATION The Optimal Competitor Configuration Maintaining Competitor Viability Moving toward the Ideal Competitor Configuration Maintaining Industry Stability PITFALLS IN COMPETITOR SELECTION PART II COMPETITIVE SCOPE WITHIN AN INDUSTRY Chapter 7 Industry Segmentation and Competitive Advantage BASES FOR INDUSTRY SEGMENTATION Structural Bases For Segmentation Segmentation Variables Finding New Segments THE INDUSTRY SEGMENTATION MATRIX Relationships Among Segmentation Variables Combining Segmentation Matrices INDUSTRY SEGMENTATION AND COMPETITIVE STRATEGY The Attractiveness of a Segment Segment Interrelationships Segment Interrelationships and Broadly-Targeted Strategies The Choice of Focus The Feasibility of New Segments to Focus On The Sustainability of a Focus Strategy Pitfalls and Opportunities for Focusers and Broadly-Targeted Competitors INDUSTRY SEGMENTATION AND INDUSTRY DEFINITION Chapter 8 Substitution IDENTIFYING SUBSTITUTES THE ECONOMICS OF SUBSTITUTION Relative Value/Price Switching Costs Buyer Propensity to Substitute Segmentation and Substitution CHANGES IN THE SUBSTITUTION THREAT Substitution and Overall Industry Demand Substitution and Industry Structure THE PATH OF SUBSTITUTION Segmentation and the Substitution Path Substitution Forecasting Models SUBSTITUTION AND COMPETITIVE STRATEGY Promoting Substitution Defense Against Substitutes Industry Versus Firm Substitution Strategy Pitfalls in Strategy Against Substitutes PART III CORPORATE STRATEGY AND COMPETITIVE ADVANTAGE Chapter 9 Interrelationships among Business Units THE GROWING IMPORTANCE OF HORIZONTAL STRATEGY INTERRELATIONSHIPS AMONG BUSINESS UNITS TANGIBLE INTERRELATIONSHIPS Sharing and Competitive Advantage The Costs of Sharing Difficulty of Matching Identifying Tangible Interrelationships INTANGIBLE INTERRELATIONSHIPS COMPETITOR INTERRELATIONSHIPS Multipoint Competitors in Unrelated Industries Multipoint Competition in Related Industries Competitors with Different Patterns of Interrelationships Forecasting Potential Competitors Chapter 10 Horizontal Strategy THE NEED FOR EXPLICIT HORIZONTAL STRATEGY Formulating Horizontal Strategy INTERRELATIONSHIPS AND DIVERSIFICATION STRATEGY Diversification Based on Tangible Interrelationships Diversification Through Beachheads Diversification and Corporate Resources PITFALLS IN HORIZONTAL STRATEGY Pitfalls in Ignoring Interrelationships Pitfalls in Pursuing Interrelationships Chapter 11 Achieving Interrelationships IMPEDIMENTS TO ACHIEVING INTERRELATIONSHIPS Sources of Impediments Interrelationships and Equity Differences in Impediments among Firms ORGANIZATIONAL MECHANISMS FOR ACHIEVING INTERRELATIONSHIPS Horizontal Structure Horizontal Systems Horizontal Human Resource Practices Horizontal Conflict Resolution Processes The Corporate Role in Facilitating Interrelationships Interrelationships and the Mode of Diversification MANAGING HORIZONTAL ORGANIZATION Promising Examples Japanese Firms and Interrelationships A New Organizational Form Chapter 12 Complementary Products and Competitive Advantage CONTROL OVER COMPLEMENTARY PRODUCTS Competitive Advantages From Controlling Complements Problems of Controlling Complements Control Over Complements and Industry Evolution Identifying Strategically Important Complements BUNDLING Competitive Advantages of Bundling Risks of Bundling Bundled Versus Unbundled Strategies Bundling and Industry Evolution Strategic Implications of Bundling CROSS SUBSIDIZATION Conditions Favoring Cross Subsidization Risks of Cross Subsidization Cross Subsidization and Industry Evolution Strategic Implications of Cross Subsidization COMPLEMENTS AND COMPETITIVE STRATEGY PART IV IMPLICATIONS FOR OFFENSIVE AND DEFENSIVE COMPETITIVE STRATEGY Chapter 13 Industry Scenarios and Competitive Strategy under Uncertainty Scenarios as a Planning Tool Industry Scenarios CONSTRUCTING INDUSTRY SCENARIOS Identifying Industry Uncertainties Independent Versus Dependent Uncertainties Identifying a Set of Scenarios Consistency of Assumptions Analyzing Scenarios Introducing Competitor Behavior into Scenarios The Number of Scenarios To Analyze Attaching Probabilities to Scenarios Summary Characteristics of Industry Scenarios INDUSTRY SCENARIOS AND COMPETITIVE STRATEGY Strategic Approaches Under Scenarios Combined and Sequenced Strategies The Choice of Strategy Under Industry Scenarios Scenario Variables and Market Intelligence SCENARIOS AND THE PLANNING PROCESS Corporate Role in Constructing Industry Scenarios Industry Scenarios and Creativity Chapter 14 Defensive Strategy THE PROCESS OF ENTRY OR REPOSITIONING DEFENSIVE TACTICS Raising Structural Barriers Increasing Expected Retaliation Lowering the Inducement for Attack EVALUATING DEFENSIVE TACTICS DEFENSIVE STRATEGY Deterrence Response Response to Price Cutting Defense or Disinvest Pitfalls in Defense Chapter 15 Attacking an Industry Leader CONDITIONS FOR ATTACKING A LEADER AVENUES FOR ATTACKING LEADERS Reconfiguration Redefinition Pure Spending Alliances To Attack Leaders IMPEDIMENTS To LEADER RETALIATION SIGNALS OF LEADER VULNERABILITY Industry Signals Leader Signals ATTACKING LEADERS AND INDUSTRY STRUCTURE Bibliography Index About the Author

Organizational Capabilities in Product Development of Japanese Firms: a Conceptual Framework and Empirical Findings

Abstract: Using a large-scale data set on product development organizations of Japanese manufacturing firms, this paper explores the effects of organizational capabilities on product development performance. We present a conceptual framework assuming that organizational capabilities consist of multilayered knowledge. Based on the idea, we classify organizational capabilities into "local," "architectural," and "process" capabilities along two dimensions: modularity and designability. The empirical analysis demonstrates differential effects of different types of organizational capabilities on different types of product development performance, and compares the differential effects between two types of industries that differ in terms of their product characteristics: system based and material based. The central message from our analysis is that the process capabilities emerging from dynamic interaction of knowledge play a crucial role as core capabilities for product development of Japanese firms in the system-based industries in which Japanese firms are relatively competitive. In the material industries, ho wever, local capabilities have major effects on performance while effects of process capabilities are limited, which underlies the relative weakness of Japanese firms in developing material-based products. Our results raise some intriguing implications on the competitive advantages and challenges of Japanese firms' product development.

The competitive advantage of nations : with a new introduction

Abstract: Preface Introduction to 1998 Edition The Need for a New Paradigm PART 1: FOUNDATIONS The Competitive Advantage of Firms in Global Industries Determinants of National Competitive Advantage The Dynamics of National Advantage PART 2: INDUSTRIES Four Studies in National Competitive Advantage National Competitive Advantage in Services PART 3: NATIONS Patterns of National Competitive Advantage: The Early Postwar Years Emerging Nations in the 1970s and 1980s Shifting National Advantage The Competitive Development of National Economies PART 4: IMPLICATIONS Company Strategy Government Policy National Agendas Epilogue Appendices

Industrial Ecology and Competitiveness

Abstract: Summary In the emerging field of industrial ecology one of the unsettled questions is the degree to which design for the environment, closing energy and materials loops, and other industrial ecology concepts apply at the firm level In this article we examine this issue with a particular focus on whether industrial ecology can guide company strategy and efforts to enhance competitiveness We conclude that industrial ecology thinking will often be useful for firms seeking to improve their resource productivity and thus their competitiveness The systems perspective that industrial ecology promotes can help companies find ways to add value or reduce costs both within their own production processes and up and down the supply chain But industrial ecology cannot always be counted upon to yield competitive advantage at the firm level In some cases, the cost of closing loops will exceed the benefits In other cases, regulatory requirements do not fully internalize environmental costs, and thus polluting firms may gain temporary or permanent cost advantages relative to companies that attempt to eliminate all emissions Finally, because industrial ecology focuses attention on materials and energy flows, it may not optimize other variables that contribute to competitiveness within the corporate setting

Internationalization of Small and Medium-Sized Technology-Based Firms: An Exploratory Study

Abstract: In recent years technology-based industries have increasingly globalized, with this change driven primarily by multinational technology-based firms. These large mature firms, which are extensively involved in global markets, provide the main conduit through which important technologies are integrated across nations (Korbin 1991). As global competition has intensified, many small and medium-sized technology-based firms have also had to adopt international perspectives (Litvak 1990). Even the SMTFs whose primary orientation is domestic must be internationally competitive in order to secure long-term success (Wright and Ricks 1994). Small and medium-sized firms usually face unique challenges in the arena of international competition due to their limited resources and capabilities, insufficiently developed administrative procedures and methods, less formal centralized planning and control systems (van Hoorn 1979; Roth 1992), and the lack of manufacturing know-how and access to distribution channels (Hull and Slowinski 1990). SMTFs, in particular, face additional challenges due to their accelerated time-to-market and product differentiation imperatives (Price and Chen 1993). The importance of the internationalization of SMTFs, as well as the unique challenges and prospects they face in this regard, call for systematic research. Accordingly, the overall purpose of this study is to explore some of the key questions pertaining to the internationalization of SMTFs. These relate to the motives that drive SMTFs to internationalize, the barriers that SMTFs must overcome to achieve successful internationalization, and the adaptive measures that they implement in order to compete successfully in the international arena. It is hoped that shedding light on these questions at a broader level of inquiry will help stimulate and guide further research which would preferably be more atomistic but at the same time provide deeper understanding of the various aspects of the internationalization process. Conceptual Background Technology-based industries have become increasingly global in recent years, as technological innovation has been a significant driver of international competition (Porter 1985). Higher technological opportunities and the economic benefits of exploiting them have created a faster rate of technological change. Accelerated technological changes have in turn increased the speed of global technological diffusion (Bettis and Hitt 1995). Another contributing factor to the globalization trend has been that the volume generated in domestic markets is no longer sufficient to support competitive levels of R & D spending (Kobrin 1991). The globalization trend has, in turn, escalated competitive rivalry in technology-based industries (Brahm 1995). Although large multinational firms initially dominated the international competitive landscape, smaller firms have also entered the race owing to the evolving conditions in international communication and trade (The Economist 1993). Oviatt and McDougall (1994) have argued that the gap in competitive advantage between large and small firms in international markets has narrowed and that internationally sustainable competitive advantage has increasingly depended upon a firm's unique assets (see also Barney 1991; Hamel and Prahalad 1990). These changes, coupled with the excessive international rivalry in technology-based industries (Brahm 1995), have made it indispensable for SMTFs to adopt international perspectives and strategies. International competitive forces and advantages in knowledge-intensive sectors have been so strong that some of the new ventures market internationally from their inception (Oviatt and McDougall 1994). SMTFs have certain advantages over larger firms, including greater flexibility, speed, and advantage-seeking behavior (Fiegenbaum and Karnani 1991; Katz 1970; Hitt, Hoskisson, and Harrison 1991). These advantages work particularly well for them in new product development and entrepreneurship, driven as they tend to be by their motivation to constantly seek new opportunities and to aggressively challenge the status quo (Aldrich and Auster 1986; Chen and Hanbrick 1995). …