Changing Strategies in Mature Industries: a Case Study

Abstract

States that while mature industries are a major part of the US economy, little empirical information is available on competitive strategies appropriate in the mature environment. Discusses, via a case study of the US hardwood lumber industry, the idea that cost‐based strategies based on Overall Cost Leadership are not sufficient for mature basic industries. Concludes that the results offer understanding of the strategic changes which can occur during the maturity stage of the industry life cycle and recommends possible ways of competing in this environment.

How do learning orientation and strategy yield innovativeness and superior firm performance?

“…Market-focused learning (Į=0,76) was measured via the 8-item scale developed by Weerawardena (2003), internally-focused learning (Į=0,92) was measured via an 8-item scale of an adapted version of measures developed by Atuahene-Gima (1993) and relationally-focused learning (Į=0,66) was measured via 8-items developed by Cohen and Levinthal (1990) and Rothwell (1992). To measure strategic choice, a literature review including Miller and Friesen (1986); Bush and Sinclair (1992); Yamin et al (1999); Panayides (2003); Powers and Hahn (2004) and Allen and Helms (2006) yielded a pool of items. The purification process generated a total of 22 items.…”

Impact of product life cycle stages on barriers to entry

“…Thus, profit margins for most firms decline. In fact, a strong cost position or cost leadership becomes necessary to remain in the market, but not enough to have competitive advantage (Bush and Sinclair, 1992). As a result of low profits, some firms exit the market or introduce newer products or products that serve some niche markets.…”

“…Most empirical studies conducted about the product life cycle concept have focused on how firms compete in the maturity stage (see, for example, Agarwal and Audretsch, 2001;Bush and Sinclair, 1992). Because barriers to entry are lower in the maturity stage, there are many firms in the market, and most try to compete on the basis of price or find a niche by introducing the same products with new features.…”

Make or buy in a mature industry? models of client - supplier relationships under TCT and RBV perspectives

“…Although the most firms operate in mature industries, there is noticeably scant research examining how firms compete in mature industries. However, it is well established that firms adjust their strategies to the life cycle of the industry (Bush & Sinclair, 1992;Porter, 1980). For instance, in emerging industries, firms seem to compete to define standards (Tushman & Anderson, 1986), race to place innovations on the market (Schoonhoven, Eisenhardt, & Lyman, 1990), and differentiate from competitors (Porter, 1980).…”