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Competitive Dynamics, Global Industry Cycles, Integration-Responsiveness, and Financial Performance in Emerging and Industrialized Country Markets

Author

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  • Julius H. Johnson, Jr.

    (College of Business Administration, University of Missouri¡XSt. Louis, U.S.A.)

  • Dinesh A. Mirchandani

    (College of Business Administration, University of Missouri¡XSt. Louis, U.S.A.)

  • Seng-Su Tsang

    (Department of International Business, Yuan Ze University, Taiwan)

Abstract

This paper examines competitive dynamics, industry cycles, and financial performance in emerging and industrialized country markets through the lens of the integration-responsiveness framework in the global information technology industry in Taiwan and the global construction equipment industry in the US. It investigates how firms in these industries fit their strategies to their strategic orientations to sustain competitive advantages. A survey of chief executives of 351 Taiwanese firms and 349 US firms highlighted the presence of industry pressures driving firms towards local responsiveness, multifocal, and global integration strategic orientations. The industry pressures predicted six different competitive strategies (conservative cost control, quality reputation, complex innovation, marketing differentiation, premium positioning, and breadth) as proposed by prior research. Multigroup comparisons of the structural models for the Taiwanese information technology and the US construction equipment industries show that firms that perceive pressures for global integration, multifocal orientation, and local responsiveness place similar emphasis on the six competitive strategies. The major finding of the comparison is that complex innovation has a dominant effect on competitive dynamics and financial performance. Other competitive strategies, while important, were not as critical to success for global firms competing in emerging and industrialized country markets.

Suggested Citation

  • Julius H. Johnson, Jr. & Dinesh A. Mirchandani & Seng-Su Tsang, 2008. "Competitive Dynamics, Global Industry Cycles, Integration-Responsiveness, and Financial Performance in Emerging and Industrialized Country Markets," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 7(1), pages 61-88, April.
    • Handle: RePEc:ijb:journl:v:7:y:2008:i:1:p:61-88
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    References listed on IDEAS

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    2. Tian, Xiaowen & Slocum, John W., 2014. "What determines MNC subsidiary performance? Evidence from China," Journal of World Business, Elsevier, vol. 49(3), pages 421-430.

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    More about this item

    Keywords

    strategic management; information technology; construction equipment;
    All these keywords.

    JEL classification:

    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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