Broadening our understanding of interfirm rivalry: A call for research on how supply networks shape competitive behavior and performance

Abstract

In their pursuit of greater performance, firms invariably compete with their rivals for customer demand or scarce resources in factor markets. Firms' competitive behavior-the series of competitive actions taken to create or maintain competitive advantage-thus, is a key predictor of profitability and has received much attention in the strategic management literature. The central tenet of this article is that supply networks and the relationships among firms in these networks fundamentally shape the nature of interfirm competition and, ultimately, firm performance. Although prior research has amply studied the competitive dynamics among (horizontal) rival firms as well as the linkages between supply network characteristics and firm performance, there remain important opportunities to examine how supply networks enable and shape firms' competitive behavior and the effectiveness of their rivalrous activity. The goal of this article, therefore, is to take stock of the advances made in prior literature and to outline topics for future study at the intersection of competition and supply chain management. Collectively, we lay out a comprehensive perspective on the role that supply networks can play in affecting competition that, we hope, will inform and guide efforts to enhance our understanding of firm-level competitive behavior and associated performance outcomes.

A theoretical model on how firms can leverage political resources to align with supply chain strategy for competitive advantage

“…We broadly identify firm-specific political resources, as supplemented by supply chain resources, to encompass several factors (e.g., Barney, 1991;Boddewyn & Brewer, 1994;Frynas et al, 2006), including the resources to: (1) scan, predict and acquire knowledge about changes in political environments via information value streams, (2) access and bargain with political actors (decision-makers) and influencers (opinion-makers) through network power, (3) capitalize on changes to the political environment via supply chain agility; (4) enhance 1 A more detailed description of the competitive dynamics theory is provided by Chen and Miller (2011), Chen et al (2021), andHofer et al (2022).…”

“…It may decrease supply risks by increasing a firm's power to bargain for favorable relationship terms (Crook & Combs, 2007). A proactive influence action may also increase risks for rivals by tilting the political environment against their operations and strategies (Chen & Miller, 2015; Hofer et al, 2022). Therefore, the proactive influencer may supplement a proactive SCRM strategy by preventing risks, increasing supply chain power, and incentivizing preventative actions.…”

From the editors: Introduction to the emerging discourse incubator on the topic of leveraging multiple types of resources within the supply network for competitive advantage

“…The first invited article is by Hofer et al (2022). They discuss the criticality of the supply network to a focal firm's capability in engaging competitive behaviors and the effectiveness of their rivalrous activities, which together affect the firm's competitive advantage.…”

“…Briefly, the competitive dynamics literature recognizes that many markets are in disequilibrium and that competitive actions are the key to competitive advantage. The competitive dynamics process involves a rival firm's awareness of their competitor's actions, the motivation to react (e.g., fear of losing market share), the capability to respond (e.g., supply chain resources), and often the subsequent engagement in a competitive countermove (Chen et al, 2007; Hofer et al, 2022). Because it is critical that firms maintain their advantage in the marketplace, this EDI is interested in understanding how supply network resources can enable the firm to take a variety of competitive actions for creating competitive advantage.…”

“…For example, scholars could further investigate how a firm with limited internal resources could leverage supply chain resources to experiment with, test, and implement new supply network structures to support the firm's engagement in competitive moves and counter‐moves (Chae et al, 2020; Hofer et al, 2022). Hofer et al (2022) concluded their paper with some methodological challenges and ideas about how to overcome these challenges.…”