Volume 7, No. 1, April 2008

 
Competitive Dynamics, Global Industry Cycles, Integration-Responsiveness, and Financial Performance in Emerging and Industrialized Country Markets
Julius H. Johnson, Jr.
College of Business Administration, University of Missouri—St. Louis, U.S.A.
Dinesh A. Mirchandani
College of Business Administration, University of Missouri—St. Louis, U.S.A.
Seng-Su Tsang
Department of International Business, Yuan Ze University, Taiwan
Abstract
This paper examines competitive dynamics, industry cycles, and financial performance in emerging and industrialized country markets through the lens of the integration-responsiveness framework in the global information technology industry in Taiwan and the global construction equipment industry in the US. It investigates how firms in these industries fit their strategies to their strategic orientations to sustain competitive advantages. A survey of chief executives of 351 Taiwanese firms and 349 US firms highlighted the presence of industry pressures driving firms towards local responsiveness, multifocal, and global integration strategic orientations. The industry pressures predicted six different competitive strategies (conservative cost control, quality reputation, complex innovation, marketing differentiation, premium positioning, and breadth) as proposed by prior research. Multigroup comparisons of the structural models for the Taiwanese information technology and the US construction equipment industries show that firms that perceive pressures for global integration, multifocal orientation, and local responsiveness place similar emphasis on the six competitive strategies. The major finding of the comparison is that complex innovation has a dominant effect on competitive dynamics and financial performance. Other competitive strategies, while important, were not as critical to success for global firms competing in emerging and industrialized country markets.
Key words: strategic management; information technology;

construction equipment
JEL classification: L7; F14; C12

Back