The tipping points of business strategy: the rise and decline of competitiveness

Citation

(2009), "The tipping points of business strategy: the rise and decline of competitiveness", Strategic Direction, Vol. 25 No. 11. https://doi.org/10.1108/sd.2009.05625kad.001

The tipping points of business strategy: the rise and decline of competitiveness

Article Type: Abstracts From: Strategic Direction, Volume 25, Issue 11

Lei D., Slocum J.W. Organizational Dynamics (USA), Start page: 131, No. of pages: 17

Purpose – To show that managers need to understand the dynamics of their industry in order to formulate successful strategies. Design/methodology/approach – Distinguishes four types of strategic modes of competing within an industry, and indicates the capabilities of, and challenges to, each type of firm; illustrates the argument with examples of each type. Findings – The strategic modes are types of firm and comprise concept drivers, pioneers, consolidators, and concept learners. Concept drivers compete in fast-growth industries and need to maintain their differentiation in order to stay competitive, by erecting high barriers to imitation. Pioneers are risk-takers who thrive in dynamic and uncertain industries, often with low entry barriers. Consolidators compete in mature industries and depend on scale economies. Lastly, concept learners adapt to create new products by using new competencies and technologies. The challenges facing each type are that: concept drivers risk having to “retreat to the cave” (their core business) when attempting to enter new markets; pioneers risk the “entrepreneurial graveyard”, since many innovations have low adoption rates, so that they do not profit the originator but some later firm; consolidators risk bureacratization, and a resulting slow death (becoming a “boiling frog”); and concept learners risk ending up in the “dinosaur pit” unless they can continue to find new technologies and other developments in their industry to trigger massive disruptions. Originality/value – Shows the importance of technological change and the stage of an industry’s life cycle; these determine the four types of strategy described. Article type: General review ISSN: 0090-2616 Reference: 38AP499

Keywords: Competitive strategy, Industry competitiveness