Explaining high performance Flashcards
Porter (a)
1979: There are five forces in imperfectly competitive markets: new entrants, customers, suppliers, substitutes and competitors Firms can influence the forces to obtain above normal economic performance
Porter (b)
1985: Generic strategies: cost leadership, differentiation, focus (target segments)
Cusumano et al.
1992: Story of Sony Betamax vs. JVC VHS in the 1970s VHS won because of alliances and the ‘bandwagon effect’ E.g. BluRay vs. HD DVD - BluRay won due to alliance with PS3 E.g. DuPont and GM - coloured paint
Baden-Fuller & Stopford
1992: Performance is down to the firm, not due to industry forces - market share is the reward, not the cause of success
Penrose
1959: Theory of the growth of the firm, origins of the RBV: firms can be thought of as bundles of productive resources; different firms possess different bundles (resource heterogeneity)
Barney
1991: Performance is a result of competitive advantage This comes from having resources that are valuable, rare, inimitable and unsubstitutable First-mover advantage creates entry barriers We can’t learn from the success of others
Peteraf
1993: Four conditions underlie sustained competitive advantage: 1) Resource heterogeneity 2) Ex-post limits to competition 3) Imperfect mobility 4) Ex-ante limits to competition Establishing rents, sustaining rents, ensuring sustained rents are retained within the firm, ensuing rents obtained aren’t offset by up-front costs necessary to acquire them
Prahalad & Hamel
1990: Long run competitiveness from the ability to build, at lower cost and more speedily than competitors, the core competences that spawn unanticipated products: - Provide access to variety of markets - Contribute to the perceived customer benefits of the end product - Difficult to imitate E.g. 3M’s competences in adhesives E.g. McDonald’s - didn’t stick to their core competencies of speed and cheapness - tried to be healthy, increased menu complexity, and are now struggling against “Fast-Casual” competitors E.g. Casio in electronics, Apple in design, VW in reliability
Dierickx & Cool
1989: Many assets are cultivated, not traded (e.g. reputation, trust, and research excellence), which means that strategic factor markets are incomplete, and that strategy should be about habit forming. E.g. John Lewis, Fortnum & Mason E.g. Skoda - made it habit to make good cars, then purchased by VW who make reliable cars
Teece et al.
1997: Dynamic capabilities lead to path dependency, where the evolution path creates an inimitable competitive advantage
Lippman & Rumelt
1982: Uncertain imitability; causal ambiguity: can’t copy when you don’t know what’s making a firm successful. What if you don’t know yourself why you’re doing well - how do you sustain it?
Denrell
2005: High performance is a signal of luck and risk-taking, only a noisy signal of capability Chance events have enduring consequences - e.g. eBay vs. Yahoo Auctions, the former had a few more users and better publicity
Arthur
1989: Increasing returns to adoption of technologies - the more it’s adopted, the more it is improved. Small historical events can lock in an inferior technology. E.g. Petrol cars over steam - petrol was built first and quickly became the standard. Like steering wheels E.g. QWERTY keyboard - first mover, network effect, Dvorak was better but couldn’t take over
Salganick et al.
2006: (Artificial music market). People buy things because they’re popular - social influence over markets - network effect E.g. JK Rowling’s Harry Potter
Powell
2003: High performance depends on the model of competitive parity you use - depends on how you measure it
