Dynamic Strategic Analysis: Demystifying simple success strategies

295 Pages·2004·4.08 MB·English

by  Sebastian Raisch (auth.)

Sebastian Raisch
Dynamic Strategic Analysis
GABLER EDITION WISSENSCHAFT
Sebastian Raisch
Dynamic Strategic Analysis
Demystifying simple success strategies
With a foreword by Prof. Dr. Gilbert Probst
Deutscher UniversiHits-Verlag
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Dissertation Universitat Genf, 2004
1. Auflage Dezember 2004
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Umschlaggestaltung: Regine Zimmer, Dipl.-Designerin, Frankfurt/Main
ISBN-13: 978-3-8244-8249-8 e-ISBN-13: 978-3-322-81883-6
001: 10.1007/978-3-322-81883-6
Foreword
Today many business environments are characterized by frequent changes that result in
a higher market dynamism and complexity. Global media industries are an up-to-date
example of this development: a fast growth period was followed by a rapid downturn.
Media companies wrote off a colossal US$ 120 billion from their balance sheets in 2002
- mostly as a result of growth strategies' failure. It seems that despite popular belief
growth or market share by itself is less than ever before a guarantor of success.
Sebastian Raisch decided to analyze various strategies in order to gain a bett8r
understanding of the determinants of successful firm performance.
When he decided to go on a research journey into the elements and dynamics of
strategic thinking and firm performance he brought along all the ingredients necessary
for such a challenging project; he had experience gained through exhaustive consulting
work, excellent knowledge of management theories and, as a result of his studies and
activities as a research assistant, specific knowledge of strategic management. His
research objectives were furthermore clearly defined and, thanks to a meticulously
planned and well-organized project as well as his enthusiasm for the topic, he had ready
access to an empirical field.
In his work he shows that although many insights may be gained from the existing
strategy literature, it is only of limited value when analyzing performance in dynamic
markets. Analyzing the factors underlying firm success has always been strategic
management's foremost activity, but the existing literature fails to capture the
increasingly dynamic and complex nature of competition. In a straight forward way
Sebastian Raisch demonstrates that strategic management theory is still highly
fragmented, often oversimplifies the interrelation between determinants, and remains
inherently static in its approach. Researchers as well as reflective practitioners will find
the result of his research well worth reading!
Corollary to the one-dimensional and static character of most existing approaches, the
great majority of empiric studies has been conducted in stable environments. Sebastian
Raisch, however, provides a comprehensive strategic analysis that captures the growing
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complexity and dynamic in the marketplace. In his study he establishes three models,
the integrated, the complex and the evolutionary model, to address the current limitations
of fragmentation, oversimplification and statism. The integrated model combines the
most relevant determinants from competing perspectives into a single model. The
complex model captures the most relevant interrelations between these determinants.
The evolutionary model encompasses the evolution of these determinants over time. The
combined results provide a state-of-the-art view of the factors and effects underlying firm
performance.
All three models were validated in a field study of the global media industries.
Differences in firm performance in dynamic markets such as the global media industry
can be explained through a comprehensive research framework that captures the
dynamic interaction of a multitude of underlying determinants.
This book definitely provides new insights into and a broader understanding of strategy
theory and the analysis of firms' success factors. Different strategy perspectives'
contributions are not simply critized, but integrated and leveraged in an integrated and
dynamic view. For once the media industry does not serve to provide simple illustrations
of television markets' consolidation and domination, to provide historic case descriptions
of huge mergers, rapid technology changes, regulatory liberalization or fierce
competition, but serves as a most interesting empirical field for understanding the
dynamics between markets, competition and performance
This piece of research allows the success factors in all kinds of industries to be
interpreted and understood. It contributed to and also served as a basis for research into
company failures (see Probst / Raisch 2004) and leads naturally to the question of what
successful companies--balanced companies as Sebastian Raisch would call them--really
do as well as providing answers.
Prof. Dr. Gilbert Probst
VI
Acknowledgements
As Paulo Coelho said in his book The Alchemist, "To realize one's destiny is a person's
only obligation. When you want something, all the universe conspires in helping you to
achieve it." Little, if anything in life, is accomplished without the assistance, support, and
love of others. I am grateful to all who helped with this project and supported me, both
intellectually and emotionally, throughout those years.
My doctoral years at the University of Geneva, were a source of immense pleasure and
rare privilege. First and foremost, I would like to thank my adviser, Professor Gilbert
Probst, for the outstanding guidance and support that he provided over the past years.
More than anything, however, I deeply appreciate the faith in me that he has continually
shown. He is, and will always be, an inspiration to all of us.
I am also deeply grateful to Professor Carlos Jarillo for many thought-provoking
discussions, for challenging me in ways that made my work stronger, as well as for
serving on my committee. A special thank you is due to Professor Yves Fluckiger and
Professor Gunther Muller-Stewens whose incisive comments cast new light upon my
approaches in this work.
I am also indebted to all my friends and colleagues at the University of Geneva. My
special thanks go out to Heidi Armbruster, Stefano Borzillo, Claire Di Giovanni, Eva
Simeth, and Thomas Straub for a wonderful time in Geneva. I couldn't have asked for
better colleagues with whom I shared this experience.
lowe more than I can say to my parents, my family, and my long-term friends from
Geneva and around the world for their support and care over the years. People come
and go, but some remain - thank you for being always there.
Finally, I would like to thank Simone for being so patient with me during the last stages of
the PhD, for encouraging me in hard times during this project, and for all the passionate
years we have lived together. I cannot imagine a more wonderful partner.
VII
To close, I would like to echo the words of Sigmund Freud: "People need not be glued
together when they belong together." While the publication of this study concludes my
time in Geneva and marks the start of my Post-Doc position at the University of St.Gall,
my friends in Geneva will always remain close to me.
Sebastian Raisch
VIII
Table of Contents
I. Introduction .............................................................................................................. 1
1.1 Research Interest. ............................................................................................... 1
1.2 Research Objectives ........................................................................................... 4
1.3 Foundations for a Dynamic ModeL ...................................................................... 6
104 Model Development & Hypotheses ..................................................................... 9
1.5 Research Methodology ..................................................................................... 13
1.6 Structure of the Study ....................................................................................... 14
II. Literature Review ................................................................................................... 17
11.1 Industrial Organization ...................................................................................... 18
11.2 Corporate Strategy ............................................................................................ 31
11.3 Business Strategy ............................................................................................. 48
1104 Resource-based View ....................................................................................... 60
III. Towards a Dynamic Research Model.. ................................................................. 75
111.1 Criticism of Classical Approaches ..................................................................... 76
111.2 The Emerging "Dynamic View" ......................................................................... 83
111.3 Foundations of a Dynamic Research Model ................................................... 109
lilA Model Development & Hypotheses ................................................................. 123
IV. Research Methodology ....................................................................................... 143
IV.1 Research Design ............................................................................................. 143
IV.2 Questionnaire Development. ........................................................................... 150
IV.3 Survey Implementation ................................................................................... 162
IVA Data Analysis .................................................................................................. 166
V. Research Findings. .............................................................................................. 177
V.1 The In tegrated Model ...................................................................................... 177
V.2 The Complex Model ........................................................................................ 199
V.3 The Evolutionary Model .................................................................................. 212
VA Implications ..................................................................................................... 224
VI. Conclusions ......................................................................................................... 235
VI.1 Summary and Implications .............................................................................. 235
VI.2 Limitations of the Study ................................................................................... 243
VI.3 Future Research ............................................................................................. 245
VI.4 Concluding Comments .................................................................................... 246
References .................................................................................................................. 247
IX
List of Figures
Figure Page
Frame of Reference................................................... 8
2 Dynamic Research Framework ....... ...................... ....... 10
3 The Integrated Model................................................. 11
4 The Structure-Conduct-Performance Paradigm............... 20
5 The PIMS Competitive Strategy Paradigm...................... 50
6 The Resource-based Model........................................ 65
7 Frame of Reference (2) .............................................. 122
8 Dynamic Research Framework (2) ................................ 124
9 The Integrated Model (2) ............................................. 129
10 Sample Distribution .................................................... 147
11 Response Distribution ................................................. 164
12 Informant Competence ................................................ 165
13 Reliability Analysis ..................................................... 168
14 Convergent Validity Analysis ........................................ 170
15 Discriminant Validity Analysis ....................................... 171
16 Mediation ................................................................. 173
17 Simple Regression Analysis (L1SREL) ............................ 179
18 Simple Regression Analysis (SPSS) .............................. 181
19 Multiple Regression -Industry Perspective ..................... 183
20 Multiple Regression - Corporate Strategy Perspective ...... 184
21 Multiple Regression - Competitive Strategy Perspective .... 185
XI