Linking Hypercompetition and Strategic Group Theories: Manoeuvering and Entry Pathways in the U.S. Insurance Industry

• Main Authors: Thomas, Howard, Fiegenbaum, A.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2001
• Subjects: Business
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3954
• Institution: Singapore Management University

Focusing on the dynamics of strategic maneuvering, this paper draws parallels between the accumulated perspectives of strategic group theory and ideas drawn from evolutionary economics and from a recent strategy-oriented book on hypercompetition (D'Aveni RA. 1994. Hypercompetition: Managing the Dynamics of Strategic Maneuvering. The Free Press: New York). Using insurance industry data, the paper first uses the methodological framework of strategic groups to define competitive positioning and the identity of close competitors. It then develops a Markovian model to analyse two important aspects of strategic maneuvering over time: the level of firm movement, and the determination of optimal maneuvering paths and their related long-term performance. The results provide insights into industry competitive dynamics and rivalry. First, there is clear evidence of strategic maneuvering over the entire time period studied and a higher level of maneuvering in the long run. Second, for some competitive scenarios, there are optimal maneuvering trajectories that optimize a firm's long-term economic performance.