Competitors' Resource-Oriented Strategies: Acting Upon Competitors' Resources Through Interventions in Factor Markets and Political Markets

In this paper, we argue that we can reach a better understanding of the relationships between firm resources and competitive advantage by considering actions that firms take against their rivals' resources in factor markets and political markets. We outline market and firm characteristics that facilitate the deployment of competitors' resource-oriented strategies. We then argue that the effectiveness of the firm's actions on its competitors' resources depends on the competitive responses of the competitors being attacked.

[1]  David J. Miller,et al.  Competitive attack, retaliation and performance: An expectancy-valence framework , 1994 .

[2]  L. Capron The long‐term performance of horizontal acquisitions , 1999 .

[3]  J. Barney Strategic Factor Markets: Expectations, Luck, and Business Strategy , 1986 .

[4]  Thomas P. Lyon,et al.  Astroturf: Interest Group Lobbying and Corporate Strategy , 2004 .

[5]  Jay B. Barney,et al.  Returns to bidding firms in mergers and acquisitions: Reconsidering the relatedness hypothesis , 1988 .

[6]  R. Coff When Competitive Advantage Doesn't Lead to Performance: The Resource-Based View and Stakeholder Bargaining Power , 1999 .

[7]  J. Tirole The Theory of Industrial Organization , 1988 .

[8]  J. Boddewyn Political resources and markets in international business: Beyond porter's generic strategies , 1994 .

[9]  John Roberts,et al.  Uncertain Imitability : An Analysis of Interfirm Differences in Efficiency under Competition , 2007 .

[10]  R. Thaler Anomalies: The Winner's Curse , 1988 .

[11]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[12]  R. Katila,et al.  Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study , 2001 .

[13]  Mark Bergen,et al.  Scanning Dynamic Competitive Landscapes: A Market-based and Resource-based Framework , 2003 .

[14]  B. Moldovanu,et al.  Auctions with Downstream Interaction Among Buyers , 2000 .

[15]  W. Mitchell,et al.  Asset Divestiture Following Horizontal Acquisitions: A Dynamic View , 2001 .

[16]  D. Leonard-Barton CORE CAPABILITIES AND CORE RIGIDITIES: A PARADOX IN MANAGING NEW PRODUCT DEVELOPMENT , 1992 .

[17]  C. Oliver STRATEGIC RESPONSES TO INSTITUTIONAL PROCESSES , 1991 .

[18]  David Besanko,et al.  Logit Demand Estimation Under Competitive Pricing Behavior: An Equilibrium Framework , 1998 .

[19]  D. Lecraw Bargaining Power, Ownership, and Profitability of Transnational Corporations in Developing Countries , 1984 .

[20]  Justine S. Hastings,et al.  Vertical Integration in Gasoline Supply: An Empirical Test of Raising Rivals' Costs , 2001 .

[21]  Margaret A. Peteraf,et al.  Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/mde.1126 Unraveling The Resource-Based Tangle , 2022 .

[22]  Elaine Mosakowski,et al.  Strategy Making Under Causal Ambiguity: Conceptual Issues and Empirical Evidence , 1997 .

[23]  Kent Nakamoto,et al.  Competitive Strategies for Late Entry into a Market with a Dominant Brand , 1990 .

[24]  Michael Song,et al.  Marketing and technology resource complementarity : An analysis of their Interaction Effect in two environmental contexts , 2005 .

[25]  Mary Tripsas Unraveling The Process Of Creative Destruction: Complementary Assets And Incumbent Survival In The Typesetter Industry , 1997 .

[26]  R. Higgins,et al.  TWENTY YEARS OF RAISING RIVALS ’ COSTS : HISTORY , ASSESSMENT , AND FUTURE , 2004 .

[27]  Mary Tripsas UNRAVELING THE PROCESS OF CREATIVE DESTRUCTION: COMPLEMENTARY ASSETS AND INCUMBENT SURVIVAL IN THE TYPESETTER INDUSTRY: UNRAVELING THE PROCESS OF CREATIVE DESTRUCTION , 1997 .

[28]  D. Teece,et al.  Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics , 1997 .

[29]  H. Gatignon,et al.  Competitive Reactions to Market Entry: Explaining Interfirm Differences , 1989 .

[30]  David J. Miller,et al.  The Resource-Based View of the Firm in Two Environments: The Hollywood Film Studios From 1936 to 1965 , 1996 .

[31]  K. Boal,et al.  Strategic resources: Traits, configurations and paths to sustainable competitive advantage , 2007 .

[32]  Carolyn Y. Woo,et al.  Hypercompetition in a Multimarket Environment: The Role of Strategic Similarity and Multimarket Contact in Competitive De-Escalation , 1996 .

[33]  S. Salop,et al.  Cost-Raising Strategies , 1987 .

[34]  S. Lippman,et al.  A BARGAINING PERSPECTIVE ON RESOURCE ADVANTAGE , 2003 .

[35]  M. Tushman,et al.  Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change , 1990 .

[36]  Robert N. Stern,et al.  The External Control of Organizations: A Resource Dependence Perspective. , 1979 .

[37]  B. Loasby The External Control of Organizations. A Resource Dependence Perspective , 1979 .

[38]  David L. Deeds,et al.  Exploration and Exploitation Alliances in Biotechnology: A System of New Product Development , 2004 .

[39]  H. Campbell When Businesses Collide: Producer Interest Groups and the Politics of Regulation , 1998 .

[40]  G. Ahuja The duality of collaboration : Inducements and opportunities in the formation of interfirm linkages , 2000 .

[41]  Justine S. Hastings,et al.  Market Power, Vertical Integration and the Wholesale Price of Gasoline , 2005 .

[42]  Rosemarie H. Ziedonis Don't Fence Me in: Fragmented Markets for Technology and the Patent Acquisition Strategies of Firms , 2003, Manag. Sci..

[43]  Fred L. Collopy,et al.  Competitor Orientation: Effects of Objectives and Information on Managerial Decisions and Profitability , 1996 .

[44]  Richard Makadok Toward a synthesis of the resource‐based and dynamic‐capability views of rent creation , 2001 .

[45]  D. Schuler Corporate Political Strategy and Foreign Competition: The Case of the Steel Industry , 1996 .

[46]  Kathleen M. Eisenhardt,et al.  CONSTRUCTING MARKETS AND ORGANIZING BOUNDARIES: ENTREPRENEURIAL ACTION IN NASCENT FIELDS. , 2004 .

[47]  Joseph T. Mahoney,et al.  The resource-based view within the conversation of strategic management , 1992 .

[48]  B. Wernerfelt,et al.  Multiple point competition , 1985 .

[49]  A. Marcus The Adversary Economy: Business Responses to Changing Government Requirements , 1984 .

[50]  A. Hillman Politicians on the Board of Directors: Do Connections Affect the Bottom Line? , 2005 .

[51]  Yves L. Doz,et al.  How MNCs cope with host-government intervention , 1980 .

[52]  I. Wilkinson,et al.  Network perspectives on interfirm conflict: reassessing a critical case in international business , 2005 .

[53]  W. Mitchell Whether and When? Probability and Timing of Incumbents' Entry into Emerging Industrial Subfields , 1989 .

[54]  Thomas J. Dean,et al.  Pollution Regulation as a Barrier to New Firm Entry: Initial Evidence and Implications for Future Research , 1995 .

[55]  C. Fombrun,et al.  Macrocultures: Determinants and Consequences , 1994 .

[56]  F. Scherer,et al.  Industrial Market Structure and Economic Performance. , 1971 .

[57]  Ken G. Smith,et al.  Dynamics of Competitive Strategy , 1992 .

[58]  Augustine A. Lado,et al.  MNC-Host Government Bargaining Power Relationship: A Critique and Extension Within the Resource-Based View , 2000 .

[59]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[60]  B. Shaffer,et al.  Exploring the Political Economy of Consumer Legislation: The Development of Automobile Lemon Laws , 2001 .

[61]  Andrew John,et al.  The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice , 2003, Manag. Sci..

[62]  Antoinette Schoar,et al.  Politically Connected CEOs and Corporate Outcomes: Evidence from France , 2004 .

[63]  D. P. Baron,et al.  Integrated Strategy: Market and Nonmarket Components , 1995 .

[64]  Michael D. Lord Constituency-based Lobbying as Corporate Political Strategy: Testing an Agency Theory Perspective , 2000, Business and Politics.

[65]  G. Keim Business and public policy: Competing in the political marketplace , 2008 .

[66]  Max Chen Competitor analysis and interfirm riva-lry: toward a theoretical integration , 1996 .

[67]  J. Klein,et al.  Why We Boycott: Consumer Motivations for Boycott Participation , 2004 .

[68]  Robert A. Peterson,et al.  First-Mover Advantage: A Synthesis, Conceptual Framework, and Research Propositions , 1992 .

[69]  D. B. Montgomery,et al.  Reasoning About Competitive Reactions: Evidence from Executives , 2005 .

[70]  Michel Grossetti,et al.  Markets from Networks. Socioeconomic Models of Production , 2003 .

[71]  Gerald J. Miller,et al.  Handbook of strategic management , 2000 .

[72]  S. Salop,et al.  Competition and Cooperation in the Market for Exclusionary Rights , 1986 .

[73]  J. Lattin,et al.  Investigating the relationship between time in market and pioneering advantage , 1994 .

[74]  Steve Thompson,et al.  The resource-based view and economics , 2001 .

[75]  Robert Wall See you in court. , 2001, Nursing standard (Royal College of Nursing (Great Britain) : 1987).

[76]  Timothy M. Gardner In the trenches at the talent wars: competitive interaction for scarce human resources , 2002 .

[77]  J. Barney Firm Resources and Sustained Competitive Advantage , 1991 .

[78]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[79]  J. Mathews Strategizing by firms in the presence of markets for resources , 2003 .

[80]  L. Capron,et al.  When do acquirers earn abnormal returns , 2002 .

[81]  Philippe Jehiel,et al.  License Auctions and Market Structure , 2006 .

[82]  Ming-Jer Chen,et al.  Nonresponse and Delayed Response to Competitive Moves: The Roles of Competitor Dependence and Action Irreversibility , 1992 .

[83]  Chad Nehrt,et al.  Maintainability of First Mover Advantages When Environmental Regulations Differ Between Countries , 1998 .

[84]  Jean-Philippe Bonardi Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies , 2004 .

[85]  Barry M. Mitnick The strategic uses of regulation — And deregulation , 1981 .

[86]  Timothy M. Gardner Interfirm Competition for Human Resources: Evidence From the Software Industry , 2005 .

[87]  Witold J. Henisz The Institutional Environment for Multinational Investment , 2000 .

[88]  Sidney G. Winter,et al.  FOUR Rs OF PROFITABILITY: RENTS, RESOURCES, ROUTINES, AND REPLICATION , 1995 .

[89]  Lori Rosenkopf BEYOND LOCAL SEARCH : BOUNDARY-SPANNING , EXPLORATION AND IMPACT IN THE OPTICAL DISC INDUSTRY Running Head : “ Beyond Local Search ” , 2000 .

[90]  Kathleen M. Eisenhardt,et al.  Special Issue: Frontiers of Organization Science, Part 2 of 2: Organizational Boundaries and Theories of Organization , 2005, Organ. Sci..

[91]  Abagail McWilliams,et al.  Raising Rivals' Costs Through Political Strategy: An Extension of Resource-based Theory , 2002 .

[92]  S. Salop,et al.  Anticompetitive Exclusion: Raising Rivals' Costs To Achieve Power over Price , 1986 .

[93]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[94]  Jesper B. Sørensen Executive Migration and Interorganizational Competition , 1999 .

[95]  C. Oliver SUSTAINABLE COMPETITIVE ADVANTAGE: COMBINING INSTITUTIONAL AND RESOURCE- BASED VIEWS , 1997 .

[96]  I. MacMillan,et al.  Competitors' responses to easily imitated new products—exploring commercial banking product introductions , 1985 .

[97]  Amy J. Hillman,et al.  The Attractiveness of Political Markets: Implications for Firm Strategy , 2005 .

[98]  E. Kitch,et al.  The Regulation of Taxicabs in Chicago , 1971, The Journal of Law and Economics.

[99]  Patrick Rey,et al.  A Primer on Foreclosure , 2007 .

[100]  Nicolai J. Foss,et al.  Equilibrium vs Evolution in the Resource-Based Perspective The Conflicting Legacies of Demsetz and Penrose , 2005 .

[101]  A. Nerkar,et al.  Beyond local search: boundary‐spanning, exploration, and impact in the optical disk industry , 2001 .

[102]  J. M. Buchanan,et al.  The Demand and Supply of Public Goods , 1968 .

[103]  Ken G. Smith,et al.  Action characteristics as predictors of competitive responses , 1992 .

[104]  P. Gertler,et al.  Strategic integration of hospitals and physicians. , 2006, Journal of health economics.

[105]  Daniel A. Levinthal,et al.  The myopia of learning , 1993 .

[106]  Margaret A. Peteraf The cornerstones of competitive advantage: A resource‐based view , 1993 .

[107]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[108]  A. Salter,et al.  Searching high and low: what types of firms use universities as a source of innovation? , 2004 .

[109]  G. Keim,et al.  The Efficacy of Business Political Activity: Competitive Considerations in a Principal-Agent Context , 1988 .

[110]  D. B. Montgomery,et al.  First-mover (dis)advantages: Retrospective and link with the resource-based view , 1998 .

[111]  A. Witteloostuijn,et al.  AN EMPIRICAL TEST OF THE RESOURCE-BASED THEORY: STRATEGIC REGULATION IN THE DUTCH AUDIT INDUSTRY , 1996 .

[112]  Louis T. Wells,et al.  Bargaining Power of Multinationals and Host Governments , 1982 .

[113]  R. Castellblanch Challenging Pharmaceutical Industry Political Power in Maine and Vermont , 2003, Journal of health politics, policy and law.

[114]  John F. Mahon,et al.  Shaping Issues/Manufacturing Agents: Corporate Political Sculpting , 1993 .

[115]  Boris Groysberg,et al.  Can They Take It With Them? The Portability of Star Knowledge Workers' Performance , 2004, Manag. Sci..

[116]  Hayagreeva Rao,et al.  Overcoming Resource Constraints on Product Innovation by Recruiting Talent From Rivals: A Study of the Mutual Fund Industry, 1986–1994 , 2002 .

[117]  Adam Brandenburger,et al.  Value-based Business Strategy , 2005 .

[118]  Marcin Strojwas,et al.  Cooperative Marketing Agreements between Competitors: Evidence from Patent Pools , 2003 .

[119]  Amy J. Hillman,et al.  Corporate Political Activity: A Review and Research Agenda , 2004 .

[120]  R. Veugelers,et al.  The impact of M&A on the R&D process: An empirical analysis of the role of technological- and market-relatedness , 2005 .

[121]  K. R. Conner A Historical Comparison of Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm? , 1991 .

[122]  J. Perloff,et al.  Modern Industrial Organization , 1990 .

[123]  J. M. Buchanan The constitution of economic policy. , 1987, Science.