Our findings conflict with traditional predictions of competitive dynamics. In markets with highly temporary advantages, strong performance (rather than a poor one as predicted by conventional theory) motivates moves. One explanation is that while high performers avoid competitive confrontation in the established market (where entrenched rivals have somewhat sustainable advantages and clear visibility of rivalrous moves), the ambiguity of new markets provides a shield to engage in moves (Zajac and Bazerman, 1991). In fact, our fieldwork suggests that managers of poorly performing firms were often surprised by the competitive moves of their higher performing rivals. As one said ‘we did not expect [one of the market leaders] to invest in an R&D project…without any prior market information.’ Another manager anticipated entry, but not later moves and said ‘before the Vodite entry, we knew that they were going to Vodites. But after that, we weren't sure if they were improving a lot of existing products or introducing a lot of new products.’ Such moves left poor performers confused and reactive. Overall, high performance prompted firms to seize the initiative in new markets. In fact, we saw that high-performing firms often adopted an all or nothing strategy and seemed inspired by the opportunity for a land grab. One high-performing manager enthusiastically described the new Vodite market as ‘the Wild West.’
We also contribute to theories of temporary advantage with insights into mutual forbearance. Prior research shows that when firms compete in overlapping market segments (Gimeno and Woo, 1996), they refrain from engaging one another. This mutual forbearance is typically beneficial, especially when firms occupy spheres of influence (Gimeno, 1999). We extend the implications of mutual forbearance by confirming that high performers act in accordance with mutual forbearance in established markets where competitive advantages are moderately temporary. But we contribute the further insight that forbearance breaks down when competitive advantages are highly temporary. Here, high-performing firms are motivated to engage in land grabbing, and are not concerned with mutual forbearance. Indeed, mutual forbearance is likely to be irrelevant when there is no status quo to disrupt. This suggests a key boundary condition for the widely observed finding that firms refrain from moves because of mutual forbearance—i.e., the relevance of mutual forbearance is contingent upon the market.
Contributions to theories of evolutionary search
We also extend the scope of evolutionary theory to competitive markets and to markets in which the duration of competitive advantage differs. Research using evolutionary theory often focuses on search by single firms on one (usually stable) landscape. We add to the theory by examining competitive interaction and search on different landscapes, including new ones in which advantages are highly temporary.
Importantly, we contribute to the growing interest in competition that creates instability on landscapes. Recent research has begun to incorporate competition in evolutionary theory by modeling landscapes in which learning from rivals is more or less difficult (Rivkin, 2000; Csaszar and Siggelkow, 2009) and where firms search by taking into account how others search (Katila and Chen, 2008; Katila et al., 2010). For example, Katila and Chen (2008) find that firms innovate more effectively when they search either early or late and avoid synchronizing their search with rivals. Our results further suggest that these performance patterns may persist: high performers are motivated to be out of sync by avoiding lock-step moves in congested established markets, and boldly search to get a head start in wide-open new market landscapes. In contrast, low performers are much more likely to be driven to counterproductive in sync search with their competitors. Our contribution to evolutionary search theory is, thus, a nuanced view of how different starting positions differently influence competitive search in different landscapes.
Уважаемый посетитель!
Чтобы распечатать файл, скачайте его (в формате Word).
Ссылка на скачивание - внизу страницы.