Journal of Management Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Resource Substitution


Affiliations
1 Management Strategy Department Samsung Economic Research Institute Seoul, South Korea 140702
2 Department of International Business & Strategy Seoul National University, Seoul, Korea, Republic of
     

   Subscribe/Renew Journal


This study focuses on the resource substitution strategy of late movers in a dynamic environment. We identify "the dark side" of a first movers' effort to sustain its causally ambiguous competency-based advantage. Then, based on this identification, we suggest a model that describes why resource substitution can be an effective strategy to late movers. We propose that although the efforts of a first mover to sustain its competitive advantage are crucial to maintain its barriers to imitation, those efforts not only decrease its capability for resource substitution due to competency's nature of causal ambiguity, but also lower its barrier to resource substitution in a highly competitive market that characterizes the current business environment. We also propose intensified causal ambiguity of the first mover as indicative of a lessened likelihood of its counterattack in response to a resource substitution of late mover.

Keywords

Causally Ambiguous Competency-Based Advantage, Barriers to Resource Substitution, Dynamic Environment, Inter-firm Rivalry
User
Notifications

  • Andrew, K. (1987), The Concept of Corporate Strategy, Homewood, IL: Dow Jones-Irwin.

  • Baldwin, W.L., and Childs, G.L. (1969), The Fast Second and Rivalry in Research and Development, Southern Economic Journal 36: 18-24.

  • Barney, J.B. (1991), Firm Resources and Sustained Competitive Advantage, Journal of Management 17: 99-120.

  • Benner M.J., and Tushman, M.L. (2003), Exploitation, Exploration, and Process Management: The Productivity Dilemma Revisited, Academy of Management Review 28: 238-256.

  • Bettis, R.A., and Weeks, D. (1987), Financial Returns and Strategic Interaction: The Case of Instant Photograph, Strategic Management Journal 8: 549-563.

  • Buckley, P.J. and Casson, M. (1976), The Future of the Multinational Enterprise, London: Macmillan.

  • Carley, W.M. (1998), Ties that Bind. Wall Street Journal, February 11: A1, A10.

  • Chen, M.J., and Hambrick, D.C. (1995), Speed, Stealth, and Selective Attack: How Small Firms Differ from Large Firms in Competitive Behavior, Academy of Management Journal 38: 453-482.

  • Collis, D. (1994), How Valuable are Organizational Capabilities? Strategic Management Journal 15: 143-152.

  • Connor, K. (1988), Strategies for Product Cannibalism, Strategic Management Journal 9 (Summer Special Issue): 9-26.

  • Connor, K. (1991), 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? Journal of Management 17: 121-154.

  • Cooper, A.C., and Schendel, D. (1976), Strategic Responses to Technological Threats, Business Horizons 19: 61-69. D’Aveni, R.A. (1994), Hypercompetition: Managing the Dynamics of Strategic Maneuvering, New York: Free Press.

  • Delios, A., Inkpen, A.C., and Ross, J. (2004), Escalation in International Strategic Alliances, Management International Review 44: 457-480.

  • Dierickx, I., and Cool, K. (1989), Asset Stock Accumulation and Sustainability of Competitive Advantage, Management Science 35: 1504-1514.

  • Dosi, G., and Marengo, L (l993), Some Elements of an Evolutionary Theory of Organizational Competencies, in R.W. England (Ed.), Evolutionary Concepts in Contemporary Economics, Ann Arbor: University of Michigan Press.

  • Finkelstein, B. (2003), AHMH Took Two-Pronged Approach to Building Volume, Organization News 11: 19.

  • Foster, R.N. (1986), Innovation: The Attacker’s Advantage. New York, Summit Books.

  • Ghemawat, P. (1986), Sustainable Advantage, Harvard Business Review 64(5): 53-57.

  • Golder, P., and Tellis, G. (1993), Pioneering Advantage: Marketing Logic or Marketing Legend, Journal of Marketing Research 30: 158-170.

  • Grant, R.M. (1997), Contemporary Strategy Analysis, Cambridge, MA: Blackwell.

  • Hamel, G., and Prahalad, C.K. (1990), Strategic Intent. The McKinsey Quarterly Summer: 3-16.

  • Harrigan, K.R. (2001), Strategic Flexibility in the Old and New Economies, in M.A. Hitt, R.E. Freeman, and J.S. Harrison (Ed), Handbook of Strategic Management, pp. 97-123, Oxford, UK: Blackwell Publishers.

  • Haunschild, P.R. (1994), How Much is that Company Worth? Interorganizational Relationships, Uncertainty, and Acquisition Premiums, Administrative Science Quarterly 39: 391-411.

  • Hedberg, B. (1981), How Organizations Learn and Unlearn, in P.C. Nystrom & W.H. Starbuck (Ed), Handbook of Organizational Design, Vol. 1, pp. 3-27, New York: Oxford University Press.

  • Hofer, C.W., and Schendel, D. (1978), Strategy Formulation: Analytical Concepts, St. Paul, MN: West Educational Publishing.

  • Huber, G.P. (1991), Organizational Learning: The Contributing Processes and the Literatures, Organizational Science 2: 88-115.

  • Hunt, S.D. (2002), Foundations of Marketing Theory: Toward a General Theory of Marketing, M.E. Sharpe, Armonk, NY.

  • Kalyanaram, G., and Gurumurthy, R. (1998), Market Entry Strategies: Pioneers versus Late Arrivals, Strategy & Business Third Quarter: 74-84.

  • King, A.W., and Zeithaml, C.P. (2001), Competencies and Firm Performance: Examining the Causal Ambiguity Paradox, Strategic Management Journal 22: 97-99.

  • Kopczak, L.R., and Johnson, M.E., (2003), The Supply-Chain Management Effect, MIT Sloan Management Review 3: 27-34.

  • Lee, H., Smith, K.G., Grimm, C.M., and Schomburg, A. (2000), Timing, Order and Durability of New Product Advantages with Imitation, Strategic Management Journal 21: 23-30.

  • Leonard-Barton, D. (1992), Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development, Strategic Management Journal 13: 111-125.

  • Lieberman, M.B., and Montgomery, D.B. (1988), First-Mover Advantages, Strategic Management Journal 9 (Summer Special Issue): 41-58.

  • Lieberman, M.B., and Montgomery, D.B. (1998), First-Mover (Dis)advantages: Retrospective and Link with the Resource-Based View, Strategic Management Journal 19: 1111-1125.

  • Lilien, G.A., and Yoon, E.S. (1990), The Timing of Competitive Market Entry: An Exploratory Study of New Industrial Products, Management Science 36: 568-585.

  • Lippman, S., and Rumelt, R. (1982), Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition, Bell Journal of Economics 13: 418-438.

  • MacMillan, I.C., McCaffery, M.L., and Van Wijk, G. (1985), Competitor’s Responses to Easily Imitated New Products: Exploring Commercial Banking Product Introductions, Strategic Management Journal 6: 75-86.

  • Mahoney, J.T., and Pandian, J.R. (1992), The Resource-Based View within the Conversation of Strategic Management, Strategic Management Journal 13: 363-380.

  • Makadok, R. (1998), Can First-Mover and Early-Mover Advantages be Sustained in an Industry with Low Barriers to Entry/ Imitation? Strategic Management Journal 19: 683-696.

  • March, J.G., and Olsen, J.P. (1975), The Uncertainty of the Past: Organizational Learning under Ambiguity, European Journal of Political Research 3: 147-171.

  • McEvily, S.K., Das, S., and McCabe, K. (2000), Avoiding Competence Substitution through Knowledge Sharing, Academy of Management Review 25: 294-311.

  • McNamara, G., Luce, R.A., and Thompson, G.H. (2002), Examining the Effect of Complexity in Strategic Group Knowledge Structures on Firm Performance, Strategic Management Journal 23: 153-170.

  • Moore, M.J., Boulding, W., and Goodstein, R. (1991), Pioneering and Market Share: Is Entry Time Endogenous and Does It Matter? Journal of Marketing Research 28: 97-104.

  • Murthi, B.P., Srinivasan, K., and Kalyanaram, G. (1996), Controlling for Observed and Unobserved Managerial Skills in Determining First-Mover Market Share Advantages, Journal of Marketing Research 33: 329-336.

  • Nair, A., and Filer, L. (2003), Cointegration of Firm Strategies within Groups: A Long-Run Analysis of Firm Behavior in the Japanese Steel Industry, Strategic Management Journal 24: 145-159.

  • Nelson, R.R., and Winter, S.G. (1982), An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, MA.

  • Peteraf, M.A. (1993), The Cornerstones of Competitive Advantage: A Resource-Based View, Strategic Management Journal 14: 179- 191.

  • Porter, M.E. (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press.

  • Porter, M.E. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press.

  • Powell, T.C. (1992), Strategic Planning as Competitive Advantage, Strategic Management Journal 13: 551-558.

  • Powell, T.C. (2003), Varieties of Competitive Parity, Strategic Management Journal 24: 61-86.

  • Prahalad, C.K., and Hamel, G. (1990), The Core Competence of the Corporation, Harvard Business Review 68: 79-91.

  • Reed, R., and DeFillippi, R.J. (1990), Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage, Academy of Management Review 15: 88-102.

  • Ritt, A. (2000), Reaching for Maximum Flexibility, Iron Age New Steel January: 20-26.

  • Robinson, W.T., Fornell, C., and Sullivan, M. (1992), Are Market Pioneers Intrinsically Stronger Than Later Entrant? Strategic Management Journal 13: 609-624.

  • Rumelt, R.P. (1984), Toward a Strategic Theory of the Firm, in R. Lamb (Ed), Competitive Strategic Management, pp. 556-570, Englewood Cliffs, NJ: Prentice-Hall.

  • Scherer, F.M., and Ross, D. (1990), Industrial Market Structure and Economic Performance, Boston: Houghton Mifflin.

  • Schoemaker, P.J.H. (1990), Strategy, Complexity, and Economic Rent, Management Science 36: 1178-1192.

  • Schoenecker, T.S., and Cooper, A.C. (1998), The Role of Firm Resources and Organizational Attributes in Determining Entry Timing: A Cross-Industry Study, Strategic Management Journal 19: 1127-1143.

  • Selznick, P. (1957), Leadership in Administration, New York: Harper & Row.

  • Shankar, V., Carpenter, G.S., and Krishnamurthi, L. (1998), Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers, Journal of Marketing Research 35(1): 54-70.

  • Smith, K.G., and Grimm, C.M. (1991), A Communication-Information Model of Competitive Response Timing, Journal of Management 17: 5-23.

  • Smith, K.G., Grimm, C.M., and Gannon, M.J. (1992), Dynamics of Competitive Strategy, Saga, Knobbier Park, CA.

  • Spender, J.C. (1996), Making Knowledge the Basis for a Dynamic View of the Firm, Strategic Management Journal 17: 45-62.

  • Starkman, D. (1997), Secrets and Lies: The Dual Career of a Corporate Spy, Wall Street Journal October 23: B1, B12.

  • Szulanksi, G. (1996), Exploring Internal Stickiness: Impediments to the Transfer of Best Practice within the Firm, Strategic Management Journal 17 (Winter Special Issue): 27-43.

  • Teece, D.J. (1998), Capturing Value from Knowledge Assets, California Management Review 40(3): 55-79.

  • Teger, A. (1980), Too Much Invested to Quit, New York: Pergamon.

  • Wernerfelt, B. (1984), A Resource-Based View of the Firm, Strategic Management Journal 5: 171-180.

  • Wernerfelt, B. (1995), A Resource-Based View of the Firm: Ten Years After, Strategic Management Journal 16: 171-174.

  • Winter, S. (1987), Knowledge and Competence as Strategic Assets, in D.J. Teece (Ed.), The Competitive Challenge: Strategies for Industrial Innovation and Renewal, pp. 159-184, Cambridge, MA: Blackwell.

  • Zajac, E.J., and Bazerman, M.H. (1991), Blind Spots in Industry and Competitor Analysis: Implications of Interfirm (Mis)perception to Strategic Decisions, Academy of Management Review 16: 37-46.

  • Zantout, Z. and Chaganti, R. (1996), New Product Introductions, Shareholders’ Wealth, and First-Mover Advantages, Journal of Financial and Strategic Decisions 9:49-61.


Abstract Views: 436

PDF Views: 1




  • Resource Substitution

Abstract Views: 436  |  PDF Views: 1

Authors

Jae Wook Yoo
Management Strategy Department Samsung Economic Research Institute Seoul, South Korea 140702
Youngjun Choi
Department of International Business & Strategy Seoul National University, Seoul, Korea, Republic of

Abstract


This study focuses on the resource substitution strategy of late movers in a dynamic environment. We identify "the dark side" of a first movers' effort to sustain its causally ambiguous competency-based advantage. Then, based on this identification, we suggest a model that describes why resource substitution can be an effective strategy to late movers. We propose that although the efforts of a first mover to sustain its competitive advantage are crucial to maintain its barriers to imitation, those efforts not only decrease its capability for resource substitution due to competency's nature of causal ambiguity, but also lower its barrier to resource substitution in a highly competitive market that characterizes the current business environment. We also propose intensified causal ambiguity of the first mover as indicative of a lessened likelihood of its counterattack in response to a resource substitution of late mover.

Keywords


Causally Ambiguous Competency-Based Advantage, Barriers to Resource Substitution, Dynamic Environment, Inter-firm Rivalry

References