A review of empirical research on dynamic competitive strategy, страница 6

The next section summarizes the content of the articles in more detail. Following the initial objective, we evaluate the contribution of each on three levels: (1) antecedents and outcomes; (2) timing of strategic actions; and (3) long-term path characteristics of strategic activity. In doing this, we hope to outline major findings and to draw conclusions about the contribution of longitudinal studies to competitive strategy.

Literature Review

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

Environmental Contingencies→Competitive Strategy

The longitudinal studies covered in this review have consistently found that environmental variables shape the path of strategic actions over time. In fact, dealing with the uncertainty associated with the environment in which a firm does business has long been seen as a primary focus of all entrepreneurial activity (Knight 1921). The most important variables studied under the heading of this link have been technological and regulatory contexts, competitor actions and the competitive landscape and, finally, a broad set of general environmental characteristics.

Technological context→Competitive strategy. The studies included in this link have been performed across a variety of industries and technological settings. They find that firms (1) react to disruptive technological changes and developments, (2) respond to continuous reductions in the recombinant search space in their current technological domain (Ahuja and Katila 2004), and (3) differ significantly in terms of their strategic responses, with speed and type of reduction varying considerably between firms (Lee and Grewal 2004). As suggested by Schumpeter (1934), researchers also found that technological change is an important factor in influencing entrepreneurial efforts to improve firm position through the introduction of new goods, services and production technologies. Firm-level changes occur at the general competitive strategy level (Banker et al. 1996) as well as in specific strategy domains such as alliances (Afuah 2000), and often significantly influence the overall competitive setting of an industry (Cool and Schendel 1987; Zúniga-Vicente et al. 2004).

Two studies included in this category have also focused on technological path dependency. In their study of a technological change in the banking industry, Pennings and Harianto (1992) show that accumulated experience in relevant technological areas increases the likelihood of a firm successfully incorporating a new technology into its competitive strategy, thereby suggesting that technological strategies are path dependent. Lee (2003) showed how the discovery of antibiotics in the pharmaceutical industry led to two alternative strategic responses, innovation and imitation, that created long-term divergent evolutionary paths that resulted in two different types of industry players, a split that exists even now, more than 40 years later.

Regulatory context→Competitive strategy. Changes in the regulatory context represent a second powerful antecedent to strategic actions, which must be properly monitored and reacted to in order to sustain a business's successful alignment with its environment (Barr and Huff 1997). Numerous practical examples, such as the discussion on CO₂ emissions or the ongoing regulatory issues in the European telecommunication, power generation and rail transportation sector demonstrate the high relevance of this linkage. Researchers have found that firms frequently change their generic strategies in response to regulatory changes (Smith and Grimm 1987; Zajac and Shortell 1989), and make significant adjustments in their competitive posture along key operational ratios (Banker et al. 1996; McCutchen 1993) if they (1) think that their welfare is directly affected, and (2) are able to identify multiple indicators and effects of the need for strategic change (Barr and Huff 1997).