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States that understanding of the durability of differentiation and positioning as strategies is generally limited, although these areas are of great interest to service marketers. Argues that service marketers must be aware of the need to create and implement durable strategies. Proposes a framework for identifying strategies resistant to competitive imitation, based on the isolating mechanisms idea. Gives examples of differentiation strategies useful for exploiting isolating mechanisms. Concludes that managers analysing the role of both competitive and customer‐based isolating mechanisms will be morelikely to adopt a long‐term, proactive view of service differentiation.

The aim of both marketing theorists and resource-based view proponents is to explain the creation and the sustainability of competitive advantages (Srivastava et al., 2001, p. 777). What has not been considered so far is the role of exploitation positions within the competitive game. The purpose of this article is to investigate the consequences of a strategy concerning the active creation of exploitation positions on the side of the customers. The reason for this is the observed tendency in several industries – elevators, paper machines, gas turbines – to actively create such positions. The underlying assumption is that this strategy leads to a competitive advantage for the initial transaction as well as to higher profits for the supplier taking into account the entire relationship. Mainly the second advantage of a higher profit depends heavily on the sustainability of an exploitation position. Therefore, this paper identifies the drivers controlling the sustainability of an exploitation position. In order to derive a broad understanding three different theoretical approaches – Transaction Cost Economics, the Resource-Based View, and Market Process Theory (Austrian Economics) – will be used to explain the effects of exploitation on the competitive position and the profit of the supplier. Finally, the outcome of this paper is threefold: First, the competitive consequences of an exploitation strategy will be identified. Second, the impact of each theoretical approach on the question of exploitation will be analyzed. Third, the integrative potential of the three different theoretical approaches will be examined. More precisely, we discuss institutional economics and information asymmetry in a truly dynamic setting and the impact of radical ignorance and alertness on the idea of isolating mechanisms. This will be done in a parallel discussion of the problems in general and along one case study which focuses on the elevator market.

Firms can (and often do) learn from each other. Benchmarking has become an accepted and increasingly widely practiced initiative for interfirm learning. Benchmarking specific capabilities and processes in one firm against another can help both firms’ managers identify strategic gaps in their capabilities and processes. More detailed forms of benchmarking may even suggest specific ways in which capabilities and processes can be improved. However, extracting significant learning from benchmarking with another company – while not unnecessarily revealing important sources of competitive advantage – requires a careful, balanced approach to managing a benchmarking process. In their paper “Limitations and challenges of benchmarking: A competence-based perspective,” Jörg Freiling and Sybille Huth develop a competence-based framework for managing benchmarking. While agreeing with the important potential benefits that benchmarking can bring to competence building, the authors point out a number of threats to a firm that may arise in a benchmarking process. In particular, the authors suggest that careful attention be paid to managing isolating mechanisms during benchmarking. Isolating mechanisms may bring a benefit by protecting strategic capabilities and processes from unintended discovery and imitation by either firm, while at the same time obscuring intended observations of each firm’s capabilities and processes that may defeat the basic intent of the benchmarking exercise. Careful management of isolating mechanisms should help assure that both parties to a benchmarking process will successfully navigate the three crucial steps identified by the authors in an effective benchmarking process: recognition, assimilation, and exploitation of new “best practices.”

The purpose of this paper is to uncover processes and the corresponding social mechanisms promoting innovation in organisations.

It is the integration of organisational learning, the internal knowledge base of the company and its external knowledge base, viewed in relation to innovations in organisations, which are the main elements discussed in this paper. In the present paper, it is the systemic angle of incidence which will be used.

An increased focus on information, knowledge and organisational learning, has provided a deeper understanding of factors and processes conducive to innovation and eventually to sustainable competitive advantages. However, little attention has been given to social mechanisms triggering innovations, which are uncovered in this paper.

A conceptual model, which represents a synthesis of the social mechanisms which influence those processes affecting innovation in social systems is presented.

The idea is that when several knowledge domains (practical, theoretical, internal and external) are connected for one specific purpose, the inherent variety may release what is creatively new, igniting innovation in social systems.

The garbage can model showed that what appears to be irrational and unpredictable choices can be explained by processes that regulate attention allocation and the availability of choice alternatives. Because attention to alternatives fluctuates, the model generates context-dependent choices: evaluations of alternatives depend on the mix of other alternatives considered. I re-examine the mechanisms by which fluctuating attention can cause context-dependent choices. Using insights from behavioral decision theory I demonstrate how adding fluctuating attention to a well-known model of organizational decision making generates context-dependent choices of a kind that could not be explained by a maximizing process.

Previous studies have argued that trust and commitment can create value in cooperative relationships. However, this study observed that, in practice, trust and commitment alone may not ensure value creation in asymmetric relationships. Accordingly, this study aims to investigate the mediating role of specific assets in the effects of trust and commitment on value creation in asymmetric buyer–seller relationships.

Contract manufacturers (CMs) in Asia were sampled to validate the argument proposed by this study. Most Taiwanese CMs are partnered with international brands (original equipment manufacturers [OEMs]) that have stronger bargaining power. This cooperative relationship is characteristically asymmetric. A questionnaire method was applied, and structural equation modeling was performed to verify the proposed hypotheses.

Specific asset investment (SAI) was a crucial mediator that explained the effects of trust and commitment on the relationship value of an asymmetric cooperative relationship. Past studies have claimed that power asymmetry results in an unequal distribution of benefits. Nevertheless, regarding the relationship between CMs and OEMs, the study revealed that relationship value could still be increased once the congruent goals have been achieved by both parties. This finding contradicts past theoretical predictions.

Characteristically asymmetric CMs–OEMs (seller–buyer) relationships cannot be maintained merely through trust and commitment, particularly in the context of power and resource imbalances in which the stronger party often possesses a wider selection of prospective partners. The results of this study suggested that the CM should unilaterally invest in specific assets conducive to a cooperative relationship as an expression of faith in the relationship with the stronger firm, thereby creating opportunities for value cocreation.

The analysis of the relevance of relationship quality in the context of asymmetric cooperative relationships confirmed the mediating influences of SAI on ensuring value creation and the maintenance of the relationships. Relationship value could still be created despite the highly asymmetry power relationship. The CMs’ SAI is the key mechanism for this achievement.

In his article ‘Regional strategies of service sector multinationals’, Rugman (2003) came to the conclusion that most MNEs in service industries are home region-based, i.e., they have more than 50% of their sales in the home region. In a more recent article, Rugman and Verbeke (2004) found that the vast majority of MNEs included in the Fortune 500, are home-region based. That was a surprising result, as the increasing economic interdependence among nations, the presence of substantial demand for high knowledge intensive goods and services throughout the triad of North America, the European Union and Asia, and the presence of large MNEs in each of the triad regions, all suggest that fierce rivalry for market share would take place throughout the triad. A transaction-cost economics explanation offered by Rugman and Verbeke (2005a) was that the required, location-specific linking investments are far more substantial when firms establish activities outside their home region than inside the home region. Linking investments are critical to permit the profitable deployment of the MNE's non-location bound FSAs across borders. Linking investments are necessary to develop or access location-bound FSAs in host countries (thus permitting national responsiveness), and sometimes to create new, recombined bundles of non-location bound FSAs (permitting increased economies of scale, scope or exploitation of national differences).

This study seeks to investigate the influence of human activities on the patterns of species diversities along the forest‐savanna boundary in Oyo state of Nigeria.

A transect was placed along the study area from the rainforest belt, through the forest savanna ecotone to the southern fringe of the Guinea savanna vegetation belt. Each study site was identified as forest or savanna or ecotone using the species found within them. Samples from trees with diameter at breast height ≥ 6 cm were collected and the numbers from the different species counted. Species diversity patterns were analysed using the Shannon and Simpson's Index.

Analysis of patterns of species diversity with the Shannon and Simpson's Index showed a decrease in the species diversity from sites with mature vegetation to the areas of vegetation succession irrespective of whether they contained forest or savanna vegetation. Also, species diversities was greater in the forest vegetation than in the savanna vegetation. The decrease in species diversity and loss in some species is attributable to the effect of landuse and other human interference along the forest savanna ecotone.

The study suggested measures to reduce biodiversity loss in the forest savanna zones of Nigeria.

To provide a theoretical explanation of why outsourcing relationships are inherently dynamic, in that the dependence of each party upon the other inevitably changes over time and thus so too will the power asymmetries between the parties.

Our approach is theoretical and draws upon insights from resource dependence theory, transaction cost economics, and the resource-based view of the firm, to focus on the power asymmetries between the focal firm undertaking the outsourcing and its suppliers. We illustrate our arguments using a longitudinal case study of the evolving relationship between Apple and the Foxconn Technology Group.

For supplier firms, the message is to upgrade, develop distinctive resources and capabilities, and diversify the customer base. Otherwise, suppliers will forever be condemned to low operating margins and the threat of being replaced by cheaper, more agile rivals. For focal firms, the message is not to rest on your laurels. The potency of isolating mechanisms may well dissipate, suppliers will no doubt strive to lessen their positions of dependence and competitors will inevitably emerge, with the result that once-profitable outsourcing arrangements may quickly erode.

We highlight the crucial role played by isolating mechanisms to underpin power asymmetries in outsourcing relationships, and thus enable focal firms to appropriate the rents from externalized value chain activities. We argue that the efficacy of many isolating mechanisms will tend to dissipate over time as competitors emerge to imitate successful strategies and products, and as resource and capability asymmetries erode.