Industry variety and performance

Abstract

This study advances a nascent perspective in the strategic management literature: a focus on the beneficial effects of competition among firms in an industry. Such a perspective supplements the traditional view of competition as firm rivalry. The overall purpose of the study is to provide a theoretical foundation for the study of the mutual gains associated with industry competition. Because of its importance to several different organizational theories, the concept of variety is examined as a potential source of interfirm benefits. The influence of variety is observed in 12 industries, four each from the growth, mature, and decline stages of the life cycle. In each life‐cycle stage, two of the industries have substantial amounts of foreign competition while the other two do not. The study's results support two broad conclusions. First, industry variety and performance are positively related, suggesting that interfirm benefits are most feasible in industries characterized by diversity among firms' competitive strategies. Second, as industries move through the life cycle, variety decreases, implying that both strategists and policymakers need to consider the impact on aggregate variety when evaluating prescriptions for the revitalization of declining industries. Implications of these findings are derived for researchers, practitioners, and policymakers.

Strategic Management and Public Service Performance

“…Viewed from the perspective of the industry as a whole, innovation occurs because all three strategy types are present (Miles et al, 1993). That is, Prospectors create opportunities in the industry by developing new technologies.…”

Discovering diversity in marketing practice

“…A first point of departure is found in the Miles et al (1993) and Miles and Snow (1986) proposition that diversity in strategy and structure is normal in any industry, that it is``good'' for an industry and furthermore that various configurations of strategy and structure may be equally effective in producing high performance. Their typology indicates that there are several routes to high performance.…”

Measuring the degree of virtualization - an empirical analysis in two Austrian industries

“…More objective indicators need to be developed and tested in larger samples. Miles et al [49] give examples for such indicators in their research on industry variety and performance. However, our results regarding the industry life cycle stage were in line with the findings of the highly reliable survey of Dachs and Leo [41], which suggests that results of this study are at least to some extent reliable.…”