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This article considers the relationship between consumers’ valuation of performance improvements and technology development over the technology life cycle. Presenting a demand-based perspective, it explores how the character of life cycle maturity, the nature of competitive threats, and firms’ innovation incentives all change when consumer demand for performance matures in advance of a technology’s performance trajectories. It characterizes demand maturity by introducing the idea of a demand S curve as a complement to the traditional technology S curve. In doing so, it offers a new lens for assessing firms’ prospects of achieving superior performance through the commercialization of new technologies.

This chapter outlines a general theory of international expansion and its effect on the performance of firms. Using the lens of this theory, it addresses the question of why most companies are “regional,” in the sense that their geographical coverage seems to be far from complete. The chapter also treats the perplexing issue of the lack of congruence in empirical findings, over the 30-year history of the Multinationality vs. Performance sub-field in International Business studies. It argues that the apparently contradictory results of past studies are but subsets of the three stages of the general theory. Finally, the chapter indicates fruitful areas for further research.

This chapter develops a multi-path theory of diversified international expansion that explains how multiple wave-shaped performance curves are created as multinational companies expand into increasingly distant and dissimilar countries. According to this theory, multinational mobile network operators (MNOs) recover from over-diversified expansion by improving their local adaptation strategies by means of reconfiguring the value chain and entering local partnerships, by improving their global replication capabilities or by concentrating expansion to clusters of similar country markets. Three dynamic propositions are developed and exemplified concerning MNOs’ diversified international expansion. Implications for international diversification research finalize the chapter.

In the field of international business one of the most basic issues is the relationship between multinationality and performance. Several hundred studies have examined the nature of this relationship, with somewhat inconclusive results. This literature is reviewed and extended in Part B of this book. However, the main contribution of this book lies in Parts A and C which explore the regional dimension of multinationality and performance.

Decisions to initiate conflict often have an irrevocable character. They tend to transform the status quo in ways that it is often foreseen only with difficulty beforehand, and this change is then mostly impossible to undo. The sentence attributed to Colin Powell talking to President Bush about the Iraq War, “You break it, you own it,” illustrates the issue quite well. Closely linked to irrevocability is the issue of conflict costs. The uncertainty about conflicts and wars is due not only to the identity of the eventual winner but also to the costs inflicted upon the parties including the victorious ones. Often, prospective losers such as Napoleon and Hitler were initial winners who were in the end defeated by an accumulation of war costs they could not master.11There is some evidence that Napoleon, and then Hitler, were driven by increasing needs to absorb more and more territories. Clearly, Napoleon sold Louisiana to Jefferson to replenish his war chest and Hitler pillaged the central banks of conquered countries to support German military expenses. It is mostly the sunk costs associated with war that account for the irrevocability problem. Unfortunately, the literature on the formal analysis of war has not dealt with this matter, representing instead conflict as involving fixed costs or fixed cost expectancies at the onset. Additional cost estimates that should be taken by a decision-maker due to possible failures or irreversibility of actions are not considered. This is nowhere more evident than in the so-called bargaining model of conflict and war, whose numerous sometimes hidden assumptions have to be discussed and analyzed. The goal of this paper is to show that irrevocable decisions add to the cost of making them. Belligerent parties often have a tendency to minimize these especially, and this is an interesting twist of the analysis of irrevocable decision-making, if estimations of the gains of war are made on the basis of risk neutral expected utility calculations. The latter consideration leads me then to formulate alternative theories of war and conflict under the assumption of rationality.

This study provides a deeper insight into the performance effects of internationalization of the most international multinational enterprises (MNEs). Most MNEs perform their business activities within their home-regional block of the world – North America, Europe or the Asia-Pacific block. Whether these regional strategies pay off is explored by means of two analyses: first, the impact of internationalization in terms of the transnationality index, and second, the impact of foreign intra-regional sales on performance is examined. Results indicate that regional strategies smooth performance declines in the early stages of internationalization but also smooth performance increases during a phase of high-foreign expansion.

Much attention has been given to adoption and diffusion, defined as the degree of market penetration, of Information and Communications Technologies (ICT) in recent years (Carter, Jambulingam, Gupta, & Melone, 2001; Kiiski & Pohjola, 2002; Milner, 2003; Benhabib & Spiegel, 2005). The theory of diffusion of innovations considers how a new idea spreads throughout the market over time. The ability to accurately predict new product diffusion is of concern to designers, marketers, managers, and researchers alike. However, although the diffusion process of new products is generally accepted as following an s-curve pattern, where diffusion starts slowly, grows exponentially, peaks, and then declines (as shown in Fig. 1), there is considerable disagreement about what factors affect diffusion and how to measure diffusion rates (Bagchi, Kirs, & Lopez, 2008).

The relevance of finance for strategy is probably never greater than during a recession. We argue that the strategy literature has been virtually silent on the issue of recessions, and that this constitutes a regrettable sin of omission. Recessions are also periods when the commonly held view of financial markets in the strategy literature – efficient, and therefore strategically irrelevant – is particularly misplaced. A key route to rectify this omission is to focus on how recessions affect investment behavior, and thereby firms’ stocks of assets and capabilities which ultimately will affect competitive outcomes. In the present chapter, we aim to contribute by analyzing how two key aspects of recessions, demand reductions and reductions in credit availability, affect three different types of investments: physical capital, R&D and innovation, and human- and organizational capital. We synthesize and conceptualize insights from finance- and macroeconomics about how recessions affect different types of investments and find that recessions not only affect the level of investment, but also the composition of investments. Some of these effects are quite counterintuitive. For example, investments in R&D are both more and less sensitive to credit constraints than physical capital is, depending on available internal finance. Investments in human capital grow as demand falls, and both R&D and human capital investments show important nonlinearities with respect to changes in demand.

This paper offers a discussion of the key multilevel issues pertaining to the multinationality–performance (M–P) relationship. Arguably, one of the most important areas of research in international business, firm internationalization and its consequences are multilevel phenomena, influenced by forces at different managerial and structural levels: from the executive, subsidiary and firm, to the country and industry. We suggest that accounting for important factors at each level and for their cross-level interactions may help reconcile inconsistent findings and advance our understanding of the M–P relationship. Based on a critical review of the literature, we offer recommendations regarding the appropriate levels of theory, measurement, and analysis to guide future research.