Assessing the Height of Mobility Barriers: A Methodology and an Empirical Test in the U.K. Grocery Industry

• Main Authors: Carroll, Charles, Pandian, J. R. M., THOMAS, Howard
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1994
• Subjects: Business Administration, Management, and Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3853; https://doi.org/10.1111/j.1467-8551.1994.tb00065.x
• Institution: Singapore Management University

A profitable niche will have few entrants if the presence of significant mobility barriers impedes entry and, hence, reduces the expected rents for entrants. Identifying sources of mobility barriers is critical in explaining how incumbents can sustain competitive advantage and obtain supranormal profits (excess rents). While much of strategic management research (and strategic group research, in particular) focuses on the pursuit of sustainable performance advantages, there is relatively little empirical research exploring the dynamics of firm movement and the impact of mobility barriers on performance. The paper analyses mobility dynamics and, most importantly, develops a method to identify the location and severity of mobility barriers. The method is illustrated on a database of large multiples in the UK retail grocery industry for the period 1982–1986. It appears that there are two dimensions of strategic change that facilitate movement into profitable niches. Implications for competition and profitability are discussed.