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Coevolution of Firm Capabilities and Industry Competition

Author

Listed:
  • Huygens, M.W.
  • Baden-Fuller, C.W.F.
  • van den Bosch, F.A.J.
  • Volberda, H.W.

Abstract

This paper proposes that rival firms not only search for new capabilities within their organization, but also for those that rest in their competitive environment. An integrated analysis of these search processes at both firm and industry levels of analysis shows how their interaction makes industries and firms coevolve over time. To contribute to an enhanced understanding of the concept of coevolution, a dynamic and integrative framework crossing meso and micro levels of analysis is constructed. This framework is applied to a longitudinal study of the music industry with a time-span of 120 years. The first part, a historical study, covers the period 1877 - 1990. The second part, a multiple-case study, covers the period 1990 - 1997. We conclude that search behavior drives coevolution through competitive dynamics among new entrants and incumbent firms and manifests itself in the simultaneous emergence of new business models and new organizational forms.

Suggested Citation

  • Huygens, M.W. & Baden-Fuller, C.W.F. & van den Bosch, F.A.J. & Volberda, H.W., 2001. "Coevolution of Firm Capabilities and Industry Competition," ERIM Report Series Research in Management ERS-2001-61-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:126
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    References listed on IDEAS

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    Cited by:

    1. Bakker, Gerben, 2012. "Adopting the rights-based model: music multinationals and local music industries since 1945," Economic History Working Papers 47507, London School of Economics and Political Science, Department of Economic History.
    2. Emmanuel Coblence & Valérie Sabatier, 2014. "Articulating Growth and Cultural Innovation in Art Museums : The Louvre's Business Model Revision," Grenoble Ecole de Management (Post-Print) hal-01346974, HAL.
    3. Dolfsma, Wilfred, 2005. "Towards a dynamic (Schumpeterian) welfare economics," Research Policy, Elsevier, vol. 34(1), pages 69-82, February.
    4. Todeva, Emanuela, 2007. "Network Co-Evolution," MPRA Paper 52842, University Library of Munich, Germany.
    5. Kwee, Z. & van den Bosch, F.A.J. & Volberda, H.W., 2007. "Coevolutionary Competence in the Realm of Corporate Longevity: How Long-lived Firms Strategically Renew Themselves," ERIM Report Series Research in Management ERS-2007-076-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Reid, Gavin C. & Smith, Julia A., 2009. "A coevolutionary analysis of organisational systems and processes: Quantitative applications to information system dynamics in small entrepreneurial firms," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(6), pages 762-781.
    7. Emmanuel Coblence & Valérie Sabatier, 2014. "Articulating Growth and Cultural Innovation in Art Museums : The Louvre's Business Model Revision," Post-Print hal-01346974, HAL.
    8. Julie Bower & Howard Cox, 2013. "Merger regulation, firms, and the co-evolutionary process: An empirical study of internationalisation in the UK alcoholic beverages industry 1985-2005," Working Papers 48, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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    More about this item

    Keywords

    coevolution; competitive regime; longitudinal research; multilevel research; music industry;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics

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