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Investigating Blue Ocean v. Competitive Strategy: A Statistical Analysis of the Retail Industry

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  • André van Stel
  • Roy Thurik
  • Andrew Burke

Abstract

The recent work of Kim and Mauborgne (2005a) has sought to turn strategic management on its head. They note that the field has been dominated by Porter’s (1980, 1985) competitive strategy and it has placed too much emphasis on the importance of competition and rivalry. By contrast they argue in favour of an alternative strategic approach – blue ocean strategy – where firms focus on value innovation, creating consumer demand and exploiting untapped markets. So far empirical analysis in this debate has been focused on case study evidence and hence has been limited in its ability to generalise. The massive appeal of the blue ocean strategy is in stark contrast with the paucity of research testing the viability and relevance of this alternative strategic approach. In this paper we use a comprehensive data set on the Dutch retail industry in order to bring some statistical evidence to the debate. We investigate the prevalence of blue ocean versus competitive strategy in this industry over the period 1982-2000. Our results show that blue ocean strategy and competitive strategy coexist within the same competitive theoretical framework. The results highlight that the dominance of either form of strategy is not categorical but rather determined by the market conditions in which the firms operate.

Suggested Citation

  • André van Stel & Roy Thurik & Andrew Burke, 2008. "Investigating Blue Ocean v. Competitive Strategy: A Statistical Analysis of the Retail Industry," Scales Research Reports H200801, EIM Business and Policy Research.
  • Handle: RePEc:eim:papers:h200801
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    1. Salmon, Mark H, 1982. "Error Correction Mechanisms," Economic Journal, Royal Economic Society, vol. 92(367), pages 615-629, September.
    2. Beesley, M E & Hamilton, R T, 1984. "Small Firms' Seedbed Role and the Concept of Turbulence," Journal of Industrial Economics, Wiley Blackwell, vol. 33(2), pages 217-231, December.
    3. Carree, Martin & Thurik, Roy, 1994. "The Dynamics of Entry, Exit and Profitability: An Error Correction Approach for the Retail Industry," Small Business Economics, Springer, vol. 6(2), pages 107-116, April.
    4. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
    5. Niels Bosma & Gerrit Wit & Martin Carree, 2005. "Modelling Entrepreneurship: Unifying The Equilibrium and Entry/Exit Approach," Small Business Economics, Springer, vol. 25(1), pages 35-48, August.
    6. Thurik, A. Roy & Carree, Martin A. & van Stel, André & Audretsch, David B., 2008. "Does self-employment reduce unemployment?," Journal of Business Venturing, Elsevier, vol. 23(6), pages 673-686, November.
    7. Kim, Changsu & Yang, Kyung Hoon & Kim, Jaekyung, 2008. "A strategy for third-party logistics systems: A case analysis using the blue ocean strategy," Omega, Elsevier, vol. 36(4), pages 522-534, August.
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