A review of empirical research on dynamic competitive strategy

A review of empirical research on dynamic competitive strategy

1.  Thomas Hutzschenreuter,

2.  Sascha Israel

International Journal of Management Reviews

Volume 11, Issue 4, pages 421–461, December 2009

Abstract

1.Top of page

2.Abstract

3.Introduction

4.Methodology

5.Literature Review

6.Suggestions for Future Research and Implications for Practice

7.Conclusion

8.References

Beginning with Chandler's 1962 seminal work, researchers have emphasized that competitive strategy is not a static phenomenon, but rather a sequence of interconnected actions and reactions unfolding over time. This paper reviews the empirical research on dynamic competitive strategy published between 1986 and 2005 in nine leading strategic management journals. An integrated framework is used to showcase the research in terms of antecedents, strategic actions and outcomes. The literature review demonstrates that significant progress has been made in the field of dynamic competitive strategy, and yet that there are still many promising lines of inquiry for future theoretical and empirical research, particularly in the areas of strategic action timing and path dependency.

Introduction

1.Top of page

2.Abstract

3.Introduction

4.Methodology

5.Literature Review

6.Suggestions for Future Research and Implications for Practice

7.Conclusion

8.References

Understanding how businesses use competitive strategies to succeed has been at the core of strategic management research for decades (Hitt et al. 2004). In the 1960s, 1970s and 1980s, Chandler (1962),¹Hofer and Schendel (1978)² and Galbraith and Schendel (1983)³ stressed that competitive strategy was not a static phenomenon, but a sequence of interconnected actions and reactions unfolding over time.

The relevance of such a dynamic perspective is exemplified through a variety of practical observations. The car manufacturer Porsche, for example, is often cited as an example of a superior competitive positioning in the automotive industry – yet this positioning is the outcome of a steady adaptation process that has spanned almost a decade. Other relevant examples can be seen in the behavior of firms during periods of intense competitive rivalry (Chen and Miller 1994; Ketchen et al. 2004), in their responses to environmental changes (Banker et al. 1996; Goodstein and Boeker 1991; Lee and Grewal 2004; Smith and Grimm 1987), and in their attempts to modify their industry positions or reach new ones (Lee 2003; Nair and Filer 2003).

These aspects of dynamic competitive strategy have implications for researchers in the field. First, they must study how firms behave over time to gain insight into the causes and consequences of competitive strategy (Bergh 1993; Menard 1991). Second, they need to observe the timing and duration of strategic activities. Third, they need to account for the long-term path characteristics of strategic change as well as the path dependencies that result from strategic choices. In short, these three dynamic aspects of competitive strategy represent a compelling argument for the use of longitudinal research in this field. It is no wonder, then, that such studies have steadily gained in popularity with leading business journals (Bergh 1993), and that strategy researchers are carrying them out despite the challenges they present.

We feel that the time is right for a careful review of the progress that has been made in empirical research on dynamic competitive strategy, and that such a review should center on longitudinal studies. We evaluate them from three angles: First, how they improve understanding of antecedents and outcomes of dynamic competitive strategy. Second, how they broaden perspective on the timing of strategic actions. Third, the degree to which they address long-term path characteristics of strategic actions. Based on our analysis of the progress that has been made with respect to all three angles, we shall turn our attention to possibilities for future research.

We begin the second section by outlining the methodology, describing how we identified the relevant literature for the review, and setting out the framework that we use to showcase how that literature addresses antecedents, strategic actions and adaptations, and outcomes. The third section includes a review of the literature and a discussion of applications using the organizing framework. We make suggestions for future research, discuss methodological challenges, and outline implications for managers in the fourth section. The final section presents our overarching conclusions.

Methodology

1.Top of page

2.Abstract

3.Introduction

4.Methodology

5.Literature Review

6.Suggestions for Future Research and Implications for Practice

7.Conclusion

8.References

Scope of the Review