Keeping Both Eyes on the Competition: Strategic Adjustment to Multiple Targets in the UK Mobile Phone Industry

Strategic Organization, Vol. 8, No. 4, pp. 347-376, November 2010

Posted: 11 Jun 2011

See all articles by Claudio Giachetti

Claudio Giachetti

Ca Foscari University of Venice; Ca' Foscari University of Venice

Joseph Lampel

Alliance Manchester Business School

Date Written: November 1, 2010

Abstract

Research suggests that firms avoid excessive differentiation or conformity by using industry competitors as reference targets in a process that Snow and Hambrick (1980) call "strategic adjustment." To date explanations of strategic adjustment have focused on the influence of only one of two sources: a) firms base targets on the collective strategic decisions of other firms in the industry; and b) firms base targets on the strategic decisions of the market leader. In this paper we explore how both these sources influence strategic adjustment by looking at the product portfolio strategies of firms in industries where competitive positions depend on periodically launching models with multiple features and functionalities. We develop hypotheses on when firms use targets based on collective industry product decisions and/or the market leader product decisions. We test these hypotheses using data on 570 mobile phone models launched in the UK by fourteen firms from 1997 to 2008.

Keywords: multiple reference targets, strategic adjustment, product decisions, mobile phone industry

Suggested Citation

Giachetti, Claudio and Giachetti, Claudio and Lampel, Joseph, Keeping Both Eyes on the Competition: Strategic Adjustment to Multiple Targets in the UK Mobile Phone Industry (November 1, 2010). Strategic Organization, Vol. 8, No. 4, pp. 347-376, November 2010, Available at SSRN: https://ssrn.com/abstract=1862246

Claudio Giachetti

Ca Foscari University of Venice

Dorsoduro 3246
Venice, Veneto 30123
Italy

Ca' Foscari University of Venice

Dorsoduro 3246
Venice, Veneto 30123
Italy

Joseph Lampel (Contact Author)

Alliance Manchester Business School ( email )

Harold Hankins Building
room 9.21
London, Choose a State M15 6PB
United Kingdom
0161-820-8344 (Phone)

HOME PAGE: http://www.manchester.ac.uk/research/joseph.lampel/furtherinformation

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