Improving firm performance by matching strategic decisionmaking processes to competitive dynamics

Academy of Management Executive

Volumn 18, Issue 4, 2004, Pages 29-43

  Ketchen Jr , David J ^a   Snow, Charles C ^b   Street, Vera L ^a  

^a FLORIDA STATE UNIVERSITY   (United States)

^b PENNSYLVANIA STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 11044237480     PISSN: 10795545     EISSN: None     Source Type: Journal    
DOI: 10.5465/AME.2004.15268671     Document Type: Review

References (65)

1. Additional definitional and background information on competitive dynamics can be found in Grimm, C. M., & Smith, K. G. 1997. Strategy as action-Industry rivalry and coordination. Cincinnati, OH: South-Western College Publishing; and Smith, K. G., Ferrier, W. J., & Ndofor, H. 2001. Competitive dynamics research: Critique and future directions. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.). The Blackwell handbook of strategic management. Oxford: Blackwell Publishers, Ltd.
2. Additional definitional and background information on competitive dynamics can be found in Grimm, C. M., & Smith, K. G. 1997. Strategy as action-Industry rivalry and coordination. Cincinnati, OH: South-Western College Publishing; and Smith, K. G., Ferrier, W. J., & Ndofor, H. 2001. Competitive dynamics research: Critique and future directions. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.). The Blackwell handbook of strategic management. Oxford: Blackwell Publishers, Ltd.
3. st century: The role of strategic leadership. The Academy of Management Executive, 13(1): 43-57.
4. Miller, C., Burke, L., & Glick. W. 1998. Cognitive diversity among upper-echelon executives: Implications for strategic decision processes. Strategic Management Journal, 19: 39-58.
5. Fredrickson, J., & Mitchell, T. 1984. Strategic decision processes: Comprehensiveness and performance in an industry with an unstable environment. Academy of Management Journal, 27(2): 399-423.
6. Delta's flight to self-service. Business Week, 7 July 2003.
7. Isobe, T., Makino, S., & Montgomery, D. B. 2000. Resource commitment, entry timing, and market performance of foreign direct investments in emerging economies: The case of Japanese international joint ventures in China. Academy of Management Journal 43(3): 468-484.
8. For detailed discussions, see Wielemaker, M. W., Elfring, T., & Volberda, H. W. 2000. Strategic renewal in large European firms: Investigating viable trajectories of change. Organization Development Journal, 18(4): 49-68; and Hamel, G., & Prahalad, C. K. 1991. Corporate imagination and expeditionary marketing. Harvard Business Review, 69(4): 81-92.
9. For detailed discussions, see Wielemaker, M. W., Elfring, T., & Volberda, H. W. 2000. Strategic renewal in large European firms: Investigating viable trajectories of change. Organization Development Journal, 18(4): 49-68; and Hamel, G., & Prahalad, C. K. 1991. Corporate imagination and expeditionary marketing. Harvard Business Review, 69(4): 81-92.
10. For a discussion of disruptive innovations, see Charitou, C. D., & Markides, C. C. 2003. Responses to disruptive strategic innovation. MIT Sloan Management Review, 45(Winter): 55-63.
11. An insightful discussion of various inertial forces that keep firms from responding to competitive moves can be found in MacMillan, I. C. 1988. Controlling competitive dynamics by taking strategic initgiative. The Academy of Management Executive, 2(2): 1-11.
12. For evidence of less advantage from first moves, see Durand, R., & Coeurderoy, R. 2001. Age, order of entry, strategic orientation, and organizational performance. Journal of Business Venturing, 16(5): 471-494. For evidence of greater advantage from first moves, see Isobe, Makino, & Montgomery, op. cit.; Robinson, W. T., & Chiang, J. W. 2002. Product development strategies for established market pioneers, early followers, and late entrants. Strategic Management Journal, 23(9): 855-866; and Lee, H., et al. 2000. Timing, order and durability of new product advantages with imitation. Strategic Management Journal, 21(1): 23-30.
13. For evidence of less advantage from first moves, see Durand, R., & Coeurderoy, R. 2001. Age, order of entry, strategic orientation, and organizational performance. Journal of Business Venturing, 16(5): 471-494. For evidence of greater advantage from first moves, see Isobe, Makino, & Montgomery, op. cit.; Robinson, W. T., & Chiang, J. W. 2002. Product development strategies for established market pioneers, early followers, and late entrants. Strategic Management Journal, 23(9): 855-866; and Lee, H., et al. 2000. Timing, order and durability of new product advantages with imitation. Strategic Management Journal, 21(1): 23-30.
14. For evidence of less advantage from first moves, see Durand, R., & Coeurderoy, R. 2001. Age, order of entry, strategic orientation, and organizational performance. Journal of Business Venturing, 16(5): 471-494. For evidence of greater advantage from first moves, see Isobe, Makino, & Montgomery, op. cit.; Robinson, W. T., & Chiang, J. W. 2002. Product development strategies for established market pioneers, early followers, and late entrants. Strategic Management Journal, 23(9): 855-866; and Lee, H., et al. 2000. Timing, order and durability of new product advantages with imitation. Strategic Management Journal, 21(1): 23-30.
15. For evidence of less advantage from first moves, see Durand, R., & Coeurderoy, R. 2001. Age, order of entry, strategic orientation, and organizational performance. Journal of Business Venturing, 16(5): 471-494. For evidence of greater advantage from first moves, see Isobe, Makino, & Montgomery, op. cit.; Robinson, W. T., & Chiang, J. W. 2002. Product development strategies for established market pioneers, early followers, and late entrants. Strategic Management Journal, 23(9): 855-866; and Lee, H., et al. 2000. Timing, order and durability of new product advantages with imitation. Strategic Management Journal, 21(1): 23-30.
16. A brief overview of this study is given in Boulding, W., & Christen, M. 2001. First-mover disadvantage. Harvard Business Review, 79(9): 20-21.
17. Miller, et al., op. cit.
18. Covin, J. G., Slevin, D. P., & Heeley, M. B. 2000. Pioneers and followers: Competitive tactics, environment, and firm growth. Journal of Business Venturing, 15(2): 175-210.
19. A description of E-Trade Group's foray into the portable mortgage market is given on-line at: E-trade offering first portable mortgage, money.cnn.com.
20. For the original conceptualization of strategic groups, see Hunt, M. S. 1972. Competition in the major home appliance industry 1960-1970. Doctoral dissertation, Harvard University. A recent review of accomplishments in the strategic-groups area is offered in McNamara, G. M., Deephouse, D. L., & Luce, R. A. 2003. Competitive positioning within and across strategic group structure: The performance of core, secondary, and solitary firms. Strategic Management Journal, 24(2): 161-181.
21. For the original conceptualization of strategic groups, see Hunt, M. S. 1972. Competition in the major home appliance industry 1960-1970. Doctoral dissertation, Harvard University. A recent review of accomplishments in the strategic-groups area is offered in McNamara, G. M., Deephouse, D. L., & Luce, R. A. 2003. Competitive positioning within and across strategic group structure: The performance of core, secondary, and solitary firms. Strategic Management Journal, 24(2): 161-181.
22. Is Kohl's coming unbuttoned? www.JbusinessweeJc.com, 28 July 2003.
23. Insightful treatments of the benefits of regional clusters, as well as many good examples, are given in Porter, M. E. 1998. Clusters and the new economics of competition. Harvard Business Review, 76(6): 77-90; and Tollman, S., et al. 2004. Knowledge, clusters, and competitive advantage. Academy of Management Review, 29(2): 258-271.
24. Insightful treatments of the benefits of regional clusters, as well as many good examples, are given in Porter, M. E. 1998. Clusters and the new economics of competition. Harvard Business Review, 76(6): 77-90; and Tollman, S., et al. 2004. Knowledge, clusters, and competitive advantage. Academy of Management Review, 29(2): 258-271.
25. Although at first glance a regional cluster may seem simply to be a strategic group based on geography, there is a key difference between these concepts. The members of a regional cluster have the potential to benefit from belonging to the cluster. These benefits can include, for example, concentration of demand (e.g., New York City's Broadway attracts a bigger collective audience than would be attracted by a series of playhouses located in different cities) or concentration of key suppliers (e.g., Hollywood studios can all draw on a large pool of actors and writers that are drawn to the cluster of studios). No such benefits are expected to accrue within a strategic group.
26. For examples, see DeCarolis, D. M., & Deeds, D. L. 1999. The impact of stocks and flows of organizational knowledge on firm performance: An empirical investigation of the biotechnology industry. Strategic Management Journal, 20(10): 953-968; and Driffield, N., & Munday, M. 2000. Industrial performance, agglomeration, and foreign manufacturing investment in the UK. Journal of International Business Studies, 31(1): 21-37.
27. For examples, see DeCarolis, D. M., & Deeds, D. L. 1999. The impact of stocks and flows of organizational knowledge on firm performance: An empirical investigation of the biotechnology industry. Strategic Management Journal, 20(10): 953-968; and Driffield, N., & Munday, M. 2000. Industrial performance, agglomeration, and foreign manufacturing investment in the UK. Journal of International Business Studies, 31(1): 21-37.
28. Some effects of firms locating near one another (agglomeration effects) are detailed in Chung, W., & Kalnins, A. 2001. Agglomeration effects and performance: A test of the Texas lodging industry. Strategic Management Journal, 22(10): 969-988; and Shaver, J. M., & Flyer, F. 2000. Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States. Strategic Management Journal, 21(12): 1175-1193.
29. Some effects of firms locating near one another (agglomeration effects) are detailed in Chung, W., & Kalnins, A. 2001. Agglomeration effects and performance: A test of the Texas lodging industry. Strategic Management Journal, 22(10): 969-988; and Shaver, J. M., & Flyer, F. 2000. Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States. Strategic Management Journal, 21(12): 1175-1193.
30. Deeds, D. L., DeCarolis, D., & Coombs, I. 2000. Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms. Journal of Business Venturing, 15(3): 211-229.
31. Staber, U. 1998. Inter-firm co-operation and competition in industrial districts. Organization Studies, 19(4): 701-724.
32. Chen, M. J. 1996. Competitor analysis and interfirm rivalry: Toward a theoretical integration. Academy of Management Review, 21(1): 100-134.
33. We appreciate an anonymous reviewer highlighting for us this aspect of competitive dynamics in the retailing industry.
34. Kaiser, E. Wal-Mart poised to take on apparel sector, Reuters, 26 June 2003.
35. McGrath, R. G., Chen, M. J., & MacMillan, I. C. 1998. Multimarket maneuvering in uncertain spheres of influence: Resource diversion strategies. Academy of Management Review, 23(4): 724-740.
36. Gimeno, J. 1999. Reciprocal threats in multimarket rivalry: Staking out spheres of influence in the US airline industry. Strategic Management Journal 20(2): 101-128.
37. Walton, S. 1992. Sam Walton: Made in America. New York: Doubleday: 191.
38. Charitou & Markides, op. cit.
39. Walton, op. cit., 191.
40. Schwenk, C. 1989. A meta-analysis oi the comparative effectiveness of devil's advocacy and dialectical inquiry, Strategic Management Journal, 10(3): 303-306.
41. Schweiger, D. M., Sandberg, W. R., & Ragab, J. W. 1986. Group approaches for improving strategic decision making: A comparative analysis of dialectical inquiry, devil's advocacy, and consensus. Academy of Management journal, 29(1): 51-71; Schweiger, D. M., Sandberg, W. R., & Rechner, P. L. 1989. Experiential effects of dialectical inquiry, devil's advocacy, and consensus approaches to strategic decision making. Academy of Management Journal, 32(4): 745-772.
42. Schweiger, D. M., Sandberg, W. R., & Ragab, J. W. 1986. Group approaches for improving strategic decision making: A comparative analysis of dialectical inquiry, devil's advocacy, and consensus. Academy of Management journal, 29(1): 51-71; Schweiger, D. M., Sandberg, W. R., & Rechner, P. L. 1989. Experiential effects of dialectical inquiry, devil's advocacy, and consensus approaches to strategic decision making. Academy of Management Journal, 32(4): 745-772.
43. For a detailed description of these relationships, see Grimm & Smith, op, cit. For a specific discussion of competitive attacks and responses between market leaders and followers, see Smith, K., Ferrier, W., & Grimm, C. 2001. King of the hill: Dethroning the industry leader. The Academy of Management Executive, 15(2): 59-70.
44. For a detailed description of these relationships, see Grimm & Smith, op, cit. For a specific discussion of competitive attacks and responses between market leaders and followers, see Smith, K., Ferrier, W., & Grimm, C. 2001. King of the hill: Dethroning the industry leader. The Academy of Management Executive, 15(2): 59-70.
45. Joy of (Vanilla) Pepsi? money.cnn.com.
46. Welch, J. 2001. Jack: Straight from the gut. New York: Warner Business Books: 390.
47. Ibid., 229.
48. This definition is given on page 433 of an article describing emotional intelligence: Mayer, J. D., & Salovey, P. 1993. The intelligence of emotional intelligence. Intelligence, 17:433-442. For more on emotional intelligence, see Goleman, D. 1995. Emotional intelligence. New York: Bantam Books.
49. This definition is given on page 433 of an article describing emotional intelligence: Mayer, J. D., & Salovey, P. 1993. The intelligence of emotional intelligence. Intelligence, 17:433-442. For more on emotional intelligence, see Goleman, D. 1995. Emotional intelligence. New York: Bantam Books.
50. Articles citing strategic groups as reference points include Fiegenbaum, A., & Thomas, H. 1995. Strategic groups as reference groups: Theory, modeling and empirical examination of industry and competitive strategy. Strategic Management Journal, 16(6): 461-476; Ketchen, D. J. & Palmer, T. B. 1999. Strategic responses to poor organizational performance: A test of competing perspectives. Journal of Management, 25(5): 683-706; and Nair, A., & Filer, L. 2003. Cointegration of firm strategies within groups: A long-run analysis of firm behavior in the Japanese steel industry. Strategic Management Journal, 24(2): 145-159.
51. Articles citing strategic groups as reference points include Fiegenbaum, A., & Thomas, H. 1995. Strategic groups as reference groups: Theory, modeling and empirical examination of industry and competitive strategy. Strategic Management Journal, 16(6): 461-476; Ketchen, D. J. & Palmer, T. B. 1999. Strategic responses to poor organizational performance: A test of competing perspectives. Journal of Management, 25(5): 683-706; and Nair, A., & Filer, L. 2003. Cointegration of firm strategies within groups: A long-run analysis of firm behavior in the Japanese steel industry. Strategic Management Journal, 24(2): 145-159.
52. Articles citing strategic groups as reference points include Fiegenbaum, A., & Thomas, H. 1995. Strategic groups as reference groups: Theory, modeling and empirical examination of industry and competitive strategy. Strategic Management Journal, 16(6): 461-476; Ketchen, D. J. & Palmer, T. B. 1999. Strategic responses to poor organizational performance: A test of competing perspectives. Journal of Management, 25(5): 683-706; and Nair, A., & Filer, L. 2003. Cointegration of firm strategies within groups: A long-run analysis of firm behavior in the Japanese steel industry. Strategic Management Journal, 24(2): 145-159.
53. Berner, R. Really big Sears stores. www.businessweek.com, 16 June 2003.
54. For example, see Hof, R., et al. Can Amazon make it? BusinessWeek, 10 July 2000: 38-43.
55. Afuah, A., & Tucci, C. L. 2001. Internet business models and strategies: Text and cases. Boston: Irwin/McGraw Hill.
56. McGrath, et al., op. cit.
57. Mathews, J. A. 1997. A silicon valley of the east: Creating Taiwan's semiconductor industry. California Management Review, 39(4): 26-54.
58. Chen, M. J., & Miller, D. 1994. Competitive attack, retaliation, and performance. Strategic Management Journal, 15: 85-102.; Chen, op. cit.
59. Chen, M. J., & Miller, D. 1994. Competitive attack, retaliation, and performance. Strategic Management Journal, 15: 85-102.; Chen, op. cit.
60. See Chapter 8 of Grimm & Smith, op. cit., for a detailed description of how to predict competitors' behavior.
61. A description of the dynamics of co-opetition in the healthcare industry is given in Gee, E. P. 2000. Co-opetition: The new market milieu. Journal of Healthcare Management, 45(6): 359-363.
62. For more detail on the organizational characteristics influencing co-opetition, see Lado, A. A., Boyd, N. G., & Hanlon, S. C. 1997. Competition, cooperation, and the search for economic rents: A syncretic model. Academy of Management Review, 22(1): 110-141.
63. To better understand the details of how co-opetition works, Maria Bengtsson and Sorenson Kock undertook a case study explained in Bengtsson, M., & Kock, S. 2000. "Coopetition" in business networks-to cooperate and compete simultaneously. Industrial Marketing Management, 29(5): 411-426.
64. Brandenberger, A. M., & Nalebuff, B. J. 1996. Co-opetition. New York: Doubleday: 4.
65. Haddad, C. Dogfight in air cargo. Business Week, 16 June 2003: 78-79.