Porter's Competitive Strategy Research Articles

An analysis of the telecommunication industry in the Sultanate of Oman using Michael Porter's competitive strategy model

PurposeMichael Porter's Five Forces Model provides an ideal mechanism and framework to study the Oman telecommunications industry's competitive structure. The purpose of this paper is to use this model to identify the competitive forces that affect it the most.Design/methodology/approachThis paper is based on empirical research. The data were collected primarily from secondary sources such as published interviews of chief executive officers of the telecommunication companies in Oman, government reports, and Telecommunication Regulatory Authority of Oman (TRA). The authors then used Michael Porter's five forces model to investigate the competitiveness of the telecommunication industry in Oman.FindingsThe analysis shows that the strongest competitive forces in the industry are rivalry among competitors and threat of substitutes. While the threat of entry and power of buyers also having a significant impact, the power of suppliers is of very limited impact. Hence, the five forces model impacts uniformly on all the players in Oman's telecommunication market and have important strategy implications for them all. The results of this analysis are then used as a critical tool to formulate effective strategies for industry players in the face of the changing dynamics of telecommunication services industry in Oman.Originality/valueThis study is one of the few papers that attempted to study the telecommunication industry in Oman in depth. However, this is the first research study that investigated the competitive landscape of this industry using an established framework such as Michael Porter's five forces model. As such, the study brought to light new insights and paradigms in competing in the telecommunication industry in Oman. This study also suggests new strategic directives to the incumbents, new entrants, buyers and suppliers.

From strategy to numbers: how to penetrate overseas market for ChinaSoft, when Chinese ITO and BPO industry being re-structured in 2012

Subject area Business strategy. Study level/applicability This case study is appropriate for MBA and EMBA courses, especially for courses oriented to emerging markets such as China. It can be used in Business Strategic Management or similar courses, combined with the methodology lectures of Managing Entry Modes and Competitive Strategy. This case study provides material for understanding/studying the development of a large Chinese software enterprise. Case overview As a result of Chinese ITO and BPO market in the face of re-structuring in 2012, Huawei invested in ChinaSoft in May and Vance info merged with HiSoft in August, both of which make ChinaSoft the third largest market-share owner. However, ChinaSoft has a dilemma in its strategic planning for the next three years. If it cannot break through the suppression from the first and the second placed companies, it may lag behind very soon. If it strives for the No. 2 position in market share, is organic growth or M&A strategy the right approach to adopt? Thus, ChinaSoft is now in need of strategic reform and restructuring. The case study analyzes the approaches that Chinese enterprises can adopt in order to sustain overall cost leadership strategies and avoid the related risks in the ITO and BPO industry. Expected learning outcomes This case study intends to encourage students to learn and use methodologies such as Porter's competitive strategy framework; Rugman and Collinson's theory, selecting and managing entry modes; four basic global strategies, by Hill and Jones. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Hungry start-up strategy: creating new ventures with limited resources and unlimited vision

The first research-based book on business strategy for start-ups Based on Cohan's venture investment experience and on his interviews with over 150 start-up CEOs Offers specific approaches for six critical start-up decisions Entrepreneurs are hungry. But it's not just because they're living on ramen and adrenaline while they pour their all into their business. Peter Cohan has found it's something deeper: a hunger to create the kind of world they want to work in. To leave a legacy, they build carefully with limited resources and maintain control of the venture's direction. For years, students have told Cohan that the seminal business strategy guide, Michael Porter's Competitive Strategy, was too big-company focused. So Cohan -- who once worked with Porter—has written the first business strategy book to address start-ups' very different challenges. Cohan focuses on six key start-up choices—setting goals, picking markets, raising capital, building teams, gaining market share, and adapting to change—explaining the unique rules start-ups must follow. For example, when setting goals, large corporations try to maximize their long-term return on equity, but resource-poor start-ups have to plan by setting a series of short-term goals—and how they do this will mean the difference between blazing a trail or flaming out. When entering a new market, well-fed companies can invest substantial time and capital before ever launching a product, but hungry start-ups must get an adequate prototype in front of customers fast, get feedback, and quickly develop a viable business model or they'll starve to death. For each of these six areas, Cohan provides a decision-making approach and lively case studies of what actual entrepreneurs have done. He extracts hard-hitting lessons not only for start-ups but also for investors and even established companies. Hungry Start-up Strategyoffers a full menu of vital information for anyone seeking to cook up a thriving business from scratch.

Competitive Strategy Trends among the Malaysian Wooden Furniture Industry: An Strategic Groups Analysis

The competitiveness indexes of the Malaysian furniture industry are declining regardless of the strong growth of the over two last decades. Although there are nominated factors to analyze this conflict from resource based view, other factors from competitive strategy view should be considered to attain a comprehensive image of the industry's structure in the current situation. This study developed a strategic group analysis based on Porter's competitive business level strategy to examine the industry structure and its likely association with the current situation of the industry as well strategic trends in the future. The obtained results demonstrated that: There are at least four logical strategic groups in the industry. Major groups that form main body of the industry do not pursue a distinctive competitive strategic orientation and so the industry is placed in a fragile position in terms of the competitive strategy. The industry is significantly under force from intensive competition and bargaining power of buyers. Differentiation is the most efficient and Cost leadership is the least efficient strategy in the industry. The industry significantly attempts to develop its strategic activities toward distinct strategic orientations in general and differentiation more than two other competitive strategic orientations. Hence, moving from dispassionate groups toward differentiation group will be main strategic effort in the future of the industry.

Consumer observations on channel choices—Competitive strategies in Finnish grocery retailing

This article aims at providing consumers’ observations on their choices between various grocery retailing channels. The theoretical roots are based on Porter's competitive strategies and their further developed variations, but also the retailing research concerning competition and consumer perspective will be discussed. The results of the study confirm that consumers have one primary store, which is often a hypermarket or a supermarket. In addition, they prefer to shop in several supplementary stores located close to their homes. The empirical study also reveals that all retail channels have both weaknesses and strengths from the consumers’ viewpoint.

Resource configurations, generic strategies, and firm performance

PurposeThis paper, anchored in the resource‐based view of the firm, attempts to develop linkages between firm‐level resources, Porter's competitive strategy space and firm performance and explores them in the context of a new industry – the marketing technology industry.Design/methodology/approachIn the marketing technology industry the authors classify resource configurations (generalists, specialists, innovators) which group firms with distinctive competences on similar resource dimensions. They then map these firm‐level resource configurations onto their respective optimal strategies in the industry's competitive strategy space.FindingsThe major findings are: some firms that are close together in strategy space vary in performance; some firms that are close together in strategy space belong to quite different resource configurations; firms that belong to the same resource configuration (i.e. are close together in resource space and distant from others) vary in performance; given the origin (i.e. resource configuration) of a new entrant there exists an optimal strategy that can be theoretically defined; and corresponding to each resource configuration there seems to exist a unique optimal region in strategy space.Originality/valueIt is one of few attempts to empirically explore the parallels between firm level resource‐based and industry level competitive strategies.

Strategic postures of third‐party logistics providers in mainland China

PurposeTo examine the strategic posture of third‐party logistics (3PLs) providers in mainland China.Design/methodology/approachA sample survey, obtained by mail, of 3PLs firms in mainland China. Key informant data are used to operationalize Porter's competitive strategy and provides a framework to identify logistics strategies pursued by 3PLs providers. Various aspects of 3PLs providers are compared by different strategy types.FindingsIdentified four logistics strategies pursued by 3PLs providers in mainland China. Differentiation strategy outperforms cost leadership strategy. Companies pursuing cost leadership are shifting towards differentiation strategy to cope with the intense competition faced in mainland China's immense logistics markets.Research limitations/implicationsBias may exist due to the mail survey. In‐depth studies on strategy formulation of 3PLs providers could be carried out to examine what factors influence the strategy formulation and explore the strategy evolution path.Practical implicationsThis study is a very insightful source of information about 3PLs in mainland China for logistics managers, investors and policy‐makers. It provides guidance for 3PLs executives to formulate logistics strategy, adjust business objectives and prioritize operations, and for logistics users to select appropriate logistics providers. There are also suggestions for government to improve the business environment for the logistics industry. The study provides a basis for research on logistics management in mainland China.Originality/valueThis study is a pioneer and comprehensive study of mainland China's 3PLs providers. To the best of our knowledge, this is the first study to examine 3PLs providers in mainland China.

Principles of management and competitive strategies: using Fayol to implement Porter

PurposeThe purpose of this paper is to present how the past, Fayol's principles of management, is applied to the present, Porter's competitive strategies – cost leadership and differentiation – and in turn how the understanding of this connection between the past and present directs the future development of firms.Design/methodology/approachThis study explores which of Fayol's principles can be matched to Porter's cost‐leadership or differentiation strategy in terms of strategy implementation.FindingsThe paper finds that the principles of division of work, authority and responsibility, unity of command, unity of direction and scalar chain are useful in the implementation of a cost leadership strategy but other, more modern alternative principles apply for differentiation strategy. Likewise, the three principles of stability of tenure of personnel, initiative and esprit de corps apply to the implementation of differentiation strategy, but not to cost leadership, where, again, alternative principles apply. The remaining six principles of discipline, subordination of individual interests to the general interest, remuneration, centralization, order and equity are applicable to implementation of both.Practical implicationsBy melding the past with the future, it shows that the flexible use of Fayol's principles in an integrated manner lays the foundation for the successful implementation of competitive strategies and the future development of firms.Originality/valueThis study documents the flexible use of Fayol's principles, an issue that has received modest attention in the literature. It also adds to the literature on the potential implication of Fayol's work for successfully implementing competitive strategies.

Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance

The contribution of IT to business performance has been studied from two main perspectives: a ‘strategy as positioning perspective,’ which underlines a market power imperative, and a resource-based view perspective, which conceptualizes the enterprise as a ‘bundle of unique resources.’ The objective of the present study is to improve our understanding of the contribution of IT to firm performance in building upon the complementarity between the two perspectives. To do so, a model proposed by [Spanos, Y.E., Lioukas, S. 2001. An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource-based perspective. Strategic Management Journal 22(10), 907–934], which comprises both a competitive strategy framework and the resource-based perspective was adapted to reflect the role played by IT. More precisely, the model encapsulates the effects of both IT support for business strategy and IT support for firm assets on firm performance. To test the model, a survey of 96 small- and medium-sized enterprises (SME) was conducted.

The Bridge to the ‘Real World’: Applied Science or a ‘Schizophrenic Tour de Force’?*

abstract This article concerns those publications which have received considerable attention in an academic as well as in a practical context. In these rare cases, it seems that it was possible to transfer scientific findings more or less directly into managerial implications. This widely shared view is contrasted with a socials systems perspective. From this point of view there cannot be a direct application of scientific knowledge. This also holds true for the classic examples of applied science. It is argued that even in these cases there is no evidence of linear knowledge transfer but rather ‘Applied Science Fiction’ (ASF). ASF comprises all techniques with which the scientific system reacts to external application pressure without having to relinquish its own self‐referential logic. Different forms of ASF are introduced. These are retrofitting, reputation, symbolic labels and undisciplined eclecticism. The ASF‐concept will be illustrated by Michael Porter's Competitive Strategy. Paradoxically, however, the conventional concept of application and ASF are a barrier for the sustainable relevance of management studies.

Persistent heterogeneity and sustainable innovation

AbstractOne of the concerns with strategy as a field is that its goal (durable profits) appears at odds with that of microeconomics (homogeneous firms with zero profits). Thus even if we can find sources of durable profits, maybe we shouldn't—because doing so comes at the expense of social welfare. In this sense, strategy is an ‘economic bad.’ Probably the most vivid evidence of this tension is the fact that Porter's Competitive Strategy (1982) is Industrial Organization turned on its head—exploiting indications of anti‐competitive behavior to create prescriptions for durable profits. This study presents a parallax view in which the field of strategy is an economic good. In this view, heterogeneity stimulates innovation and economic growth. The underlying logic is that heterogeneity fuels diffusion; diffusion erodes leaders' shares; the loss of shares stimulates innovation, which in turn fuels new diffusion. I develop this view through a simple model of firms embedded in an industry, and then evaluate the model via simulation. The key issue for the model is whether there are steady states that sustain heterogeneity and innovation. Results indicate that heterogeneity persists in roughly half the industry conditions I examined. Furthermore innovation and growth are sustained under those conditions. What is comforting about the set of conditions is that they accommodate (and indeed require) all the things we hold dear: industrial policy, and strategic as well as routine behavior by firms. The new insights are as follows: (1) heterogeneity fuels growth (thus ‘strategy’ is an economic good, rather than anathema to allocative efficiency); (2) persistent heterogeneity is feasible even in the presence of spillovers (without isolating mechanisms); (3) but this heterogeneity (while persistent) requires managers to actively preserve the inherent value of their resource advantages—firms can't rest on their laurels; (4) policy prescriptions differ from those of prior innovation models. Copyright © 2003 John Wiley & Sons, Ltd.

Benjamin Greygoose & Sons: survival in the death industry

This case study concerns a company, operating within a highly sensitive industry, which needs to adopt new planning and control procedures along with performance measures in order to ensure its long term survival. The case explores the characteristics of the UK funeral industry, and the impact of the incursion of large overseas companies on the operation of small family businesses. Porter's (1980) Competitive Strategy framework provides a vehicle for the analysis of generic strategies to secure competitive advantage when cost leadership is not a practical possibility. Product diversification and niche marketing are explored in a Teaching Note to a rewarding case, but one which may raise the emotional sensitivity of subjects.

An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource‐based perspective

AbstractIn this study we revisit some fundamental questions that are increasingly at the heart of current strategic management discourse regarding the relative impact of industry and firm‐specific factors on sustainable competitive advantage. We explore this issue by referring to respective assertions of two major perspectives that dominate the literature over the last two decades: the Porter framework of competitive strategy and the more recent resource‐based view of the firm. A composite model is proposed which elaborates upon both perspectives' divergent causal logic with respect to the conditions relevant for firm success.Empirical findings suggest that industry and firm specific effects are both important but explain different dimensions of performance. Where industry forces influence market performance and profitability, firm assets act upon accomplishments in the market arena (i.e., market performance), and via the latter, to profitability. The paper concludes with directions for future research that will seek to integrate both content and process aspects of firm behavior. Copyright © 2001 John Wiley & Sons, Ltd.

Enhancing competitiveness in the hospitality industry: Revisiting Porter's generic competitive strategies in Greece

This paper attempts to examine the choices and practices concerning the formulation of marketing strategies of hospitality organisations in Greece, a traditional tourism destination. The introduction includes a bibliographical review of marketing strategies in general and of the theory of generic competitive strategies that was developed by Michael Porter in particular. A brief reference to the development of the hospitality and tourism industry in Greece is presented and the research methodology that was followed is described. The survey findings are presented in tabulation form and a discussion follows.

Administrative Skill as Competitive Advantage – Extending Porter's Analytical Framework

AbstractCompetitive advantage is produced by resources that allow a firm to become more profitable than its competitors. Strategic management studies based on Porter's competitive strategy model assume that such resources are based on competitive positioning, i. e., on cost leadership or differentiation strategies, or on strategic group membership bolstered by mobility barriers. The theme of this study is that administrative skills ‐ particularly the ability to align an organization's structure, strategymaking, and environment – provide an important, but neglected, source of competitive advantage. Consistent with a resource‐based view of the firm, it is shown that these skills meet all the criteria for a strategic resource– they not only produce economic value, but are also scarce, imperfectly imitable, and imperfectly tradeable in factor markets. In an empirical study, it is shown that administrative skills account for a significant proportion of profitability variance, over and above the proportions accounted for by industry or strategic group membership.RésuméL'avantage compétitif est produit par des resources qui permettent à une firme de devenir plus profitable que ses concurrents. Pour la recherche en management stratégique basée sur le modèle de stratégie compétitive de Porter, de telles resources sont généralement assumées être soit le résultat d'un positionement compétitif (i. e. par des stratégies de supériorité des coûts ou de différentiation) ou le résultat de l'appartenance à un groupe stratégique magnifiée par des barrières à la mobilité. Le thème de cette étude est que la dextérité administrative – particulièrement la capacité d'aligner la structure, la stratégie, et l'environement d'une organisation – offre une source d'avantage compétitif important mais négligé. Il est démontré que cette dextérité satisfait tous les critères d'une ressource stratégique – non seulement produit‐elle une valeur économique mais aussi est‐elle rare, imparfaitement imitable, et imparfaitement échangeable dans les marchés de facteurs. Dans une recherche empirique, it est démontré que la dextérité administrative est responsable d'une proportion importante de la variance de la profitabilité, bien au‐delà de la proportion dont l'industrie et l'appartenance à un groupe stratégique sont responsables.

THE GROWTH AND SIGNIFICANCE OF THE COVENTRY CAR COMPONENT INDUSTRY, 1895–1914

AbstractFor some time, historians have recognised the significant contribution of Coventry firms in the birth and development of the British motor industry. However, attention has largely focused on the rise of the car assemblers, and consequently the car component sector, a significant portion of the motor industry, has remained neglected. This omission is made even more surprising when it is considered that by 1914 Coventry was one of the leading component manufacturing centres in Britain, It is the intention of this article to explore the origins of the Coventry car component industry and account for its pattem of development. In order that these objectives are achieved, analysis will take place within an economic model appropriate to the exploration of emergent industries. Michael Porter's Competitive Strategy Model identifies the important structural features that determine the nature of competition in a particular industry. The model suggests that an industry can be shaped by one of five ‘prominent ...