A review of empirical research on dynamic competitive strategy, страница 13

Still other researchers have examined the competitive strategy→organizational performance link by focusing specifically on market entry strategies. Studies taking this perspective strongly emphasize the performance implications of timing. Cumulative evidence regarding market entry strategies suggests that being the first to enter a market or to introduce a new product may often have positive performance implications, but that these advantages erode over time. For instance, Lee et al. (2000) show that the faster a firm introduces a new product, the higher the abnormal stock returns, but show too that imitations by competitors erode returns over time. Makadok (1998) studies a similar relationship, and finds that first and early movers in a product category command a larger market share and a higher price, with differences increasing as more time elapses between leader and follower. This finding is also confirmed by Huff and Robinson (1994), who show that followers are able to improve their position as time passes.

Ferrier et al. (1999) extend these findings by studying matched sets of leader–challenger pairs across several industries. They look at the time elapsed between competitive action and response and at other action characteristics such as similarity or complexity, to show that market leaders, who perform more actions, are faster to adapt to newly created competitive actions and have more sophisticated action repertoires, are better able to defend their positions. This suggests that the timing of strategic actions is an important driver of firm performance for other decisions besides entry.

Finally, a number of studies have focused on the impact on performance of specific strategic moves such as increases in innovation intensity (Roberts and Amit 2003), establishment of institutional links (Baum and Oliver 1991) and of inter-firm alliances networks (Hagedoorn and Schakenraad 1992; Lorenzoni and Lipparini; 1999), and increases in customer service (Nayyar 1995). However, while there certainly is a contribution made by these studies to understanding the phenomenon of dynamic competitive strategy, they often focus on very narrow phenomena or are rooted in a variety of different streams of research, thus not permitting a detailed summary in the course of this review.

Competitive Strategy→Organizational Contingencies

Similarly to environmental variables, competitive strategy shapes the internal characteristics of the firm, which in turn represent contingencies for subsequent strategic actions and adaptations.

Competitive strategy→Strategic context. Washington and Ventresca (2004) authored the only study identified in this review whose focus is on the impact of strategic actions on strategic context. Their results show that strategic actions influence the firm's ‘dominant logic’, which summarizes the firm's strategic orientation and reflects its history of past strategic decisions. Strategic actions shape this context by extending or revising past experiences, interpretation schemes or organizational routines, which in turn influences future strategic choices. We found little that would fall under this link in longitudinal studies. This may be due to the empirical difficulties of operationalizing constructs such as strategic context, as well as the traditional separation between strategy process and strategy content research.

Competitive strategy→Organizational structure. Amburgey and Dacin (1994) study the relationship between product market strategy and organizational structure and show that a change in strategy increases the probability of a change in administrative structure. The greater the magnitude of the change in strategy, the greater the likelihood of a change in structure, but the likelihood of change decreases as time passes (Amburgey and Dacin 1994). Competitive strategy can also influence the type and magnitude of subsequent structural change. However, the impact seems to vary considerably between different aspects of strategy and structure, and there is not yet a comprehensive picture. There is evidence that changes in R&D expenditures have specific capital structure implications (O’Brien 2003). On the other hand, there seems to be no relationship between type of strategic change and type of executive succession (Wiersema 1992).