Are the economic and strategic advantages that accrue to many entrants into an industry?

Abstract

This article surveys the theoretical and empirical literature on mechanisms that confer advantages and disadvantages on first-mover firms. Major conceptual issues are addressed, and recommendations are given for future research. Managerial implications are also discussed.

Journal Information

Strategic Management Journal publishes original refereed material concerned with all aspects of strategic management. It is devoted to the improvement and further development of the theory and practice of strategic management and it is designed to appeal to both practising managers and academics. Strategic Management Journal also publishes communications in the form of research notes or comments from readers on published papers or current issues. Editorial comments and invited papers on practices and developments in strategic management appear from time to time as warranted by new developments. Overall, SMJ provides a communication forum for advancing strategic management theory and practice. Such major topics as strategic resource allocation; organization structure; leadership; entrepreneurship and organizational purpose; methods and techniques for evaluating and understanding competitive, technological, social, and political environments; planning processes; and strategic decision processes are included in the journal. Strategic Management Journal is currently published 13 times a year.

Publisher Information

Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library [wileyonlinelibrary.com] is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities.

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journal article

Sustaining IT Advantage: The Role of Structural Differences

MIS Quarterly

Vol. 15, No. 3, Special Issue: [Strategic Use of Information Systems] [Sep., 1991]

, pp. 275-292 [18 pages]

Published By: Management Information Systems Research Center, University of Minnesota

//doi.org/10.2307/249639

//www.jstor.org/stable/249639

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Abstract

Information systems are strategic business tools, frequently essential to a firm and central to its competitive strategy. Their importance is now acknowledged. But information technology-equipment and services-is available to all firms, and most applications can be duplicated. The copying firm often enjoys the advantages of newer and better technology, learns from the experience of the innovator, and thus can offer comparable services at lower costs. When can an information technology-based strategy confer sustainable competitive advantage? The answer may lie with the role of strategic resources in explaining the allocation of economic benefits from an IT innovation. Specifically, information technology can lead to sustainable competitive advantage when it is used to leverage differences in strategic resources. This may be true even in cases where duplication is relatively easy and there are few dynamic effects, like first-mover advantages, to protect the innovation. An important characteristic of IT is its ability to manage interactions among economic activities; economic theory can be used to establish a link between this characteristic of IT and shifts in resource values. This allows us to identify and examine some opportunities for deploying IT to leverage structural resource differences among firms, including differences in vertical integration and diversification as well as differences in the quality and organization of key resources.

Journal Information

The editorial objective of the MIS Quarterly is the enhancement and communication of knowledge concerning the development of IT-based services, the management of IT resources, and the use, impact, and economics of IT with managerial, organizational, and societal implications. Professional issues affecting the IS field as a whole are also in the purview of the journal.

Publisher Information

Established in 1968, the University of Minnesota Management Information Systems Research Center promotes research in MIS topics by bridging the gap between the corporate and academic MIS worlds through the events in the MISRC Associates Program.

What are the benefits that accrue to early entrants into a market?

Being first typically enables a company to establish strong brand recognition and customer loyalty before competitors enter the arena. Other advantages include additional time to perfect its product or service and setting the market price for the new item.

What are the 4 competitive advantages?

The four primary methods of gaining a competitive advantage are cost leadership, differentiation, defensive strategies and strategic alliances.

What are the advantages of economies of scale?

Increased profits – Economies of scale lead to increased profits, generating a higher return on capital investment and providing businesses with the platform to grow. Larger business scale – As a business grows in size, it solidifies and becomes less vulnerable to external threats, such as hostile takeover bids.

What are the 5 competitive advantages?

Sources of Competitive Advantage.
Product Attribute Differentiation. One way to gain an advantage over competitors is by differentiating your product from theirs. ... .
Customers' Willingness to Pay. ... .
Price Discrimination. ... .
Bundled Pricing. ... .
Human Capital..

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