Abstract

Despite their prevalence and significance, competitive wars have received limited attention from the strategy literature. Our knowledge of how inter-organizational linkages influence competitive wars is particularly lacking. Drawing on the social embeddedness perspective, we argue that both direct linkages (i.e., strategic alliances) and indirect linkages (i.e., common ownership ties and common analyst ties) reduce the likelihood of war, thereby functioning as the glue that binds firms together. Yet once competitive wars are launched in related markets, indirect linkages through common third parties may continuously function as glue, reducing the likelihood of war spillover, whereas direct linkages, such as strategic alliances, may facilitate the spillover of competitive wars, akin to adding gasoline to a fire. Using data from the U.S. domestic airline industry between 1991 and 2010, our empirical evidence offers strong support for our predictions.

Keyword

Competitive Strategy ;  Competitive dynamics ;  Topic Areas ;  Strategic Management

Abstract

In fast-paced markets, the speed of action is critical to gaining competitive advantage. Yet, who will act quickest to rise to emergent challenges and opportunities? We investigate this question of competitive dynamics by combining behavioral and resource-based theories of the firm to explore drivers particularly relevant in an emerging economy context. Our empirical study based on a survey in China finds that strategic growth actions are taken faster by firms with underperforming market share, strong technological capabilities and strong leader strategic competences. In contrast, strategic joint actions with other businesses are employed more speedily by firms under financial pressures but with strong leader strategic competences.

Keyword

Behavioral theory of the firm ;  China ;  Competitive dynamics ;  Resource-based view ;  Speed of action

Abstract

What drives firms, particularly those from emerging economies, to engage in competitive catch-up with world leaders? We study the first step leading to catch-up, namely the managerial intent to acquire strategic assets that help closing the gap. Theoretically grounded in the awareness-motivation-capability (AMC) framework of competitive dynamics, we identify key factors contributing to firms' strategic intent to catch-up by acquiring strategic assets abroad. Using a sample of 154 Chinese firms, we find that firms' strategic assets seeking intent of foreign direct investment is influenced by their exposure to foreign competition, their governance structure, and relevant financial and managerial capabilities.

Keyword

Competitive catch-up ;  Competitive dynamics ;  Foreign direct investment ;  MNEs from emerging economies ;  Strategic asset seeking