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

Abstract

This paper examines competitive dynamics,industry cycles, and financial performance in emerging and industrialized country markets through the lens of the integrationresponsiveness framework in the global information technology industry in Taiwan and the global construction equipment industry in the US. It investigates how firms in these_x000D_ 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_x000D_ presence of industry pressures driving firms towards local responsiveness, multifocal, and_x000D_ global integration strategic orientations. The industry pressures predicted six different_x000D_ competitive strategies (conservative cost control, quality reputation, complex innovation,_x000D_ marketing differentiation, premium positioning, and breadth) as proposed by prior research._x000D_ 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.