Article first published online: 10 AUG 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 35, Issue 11, pages 1585–1604, November 2014
How to Cite
Wang, R. D. and Shaver, J. M. (2014), Competition-driven repositioning. Strat. Mgmt. J., 35: 1585–1604. doi: 10.1002/smj.2167
- Issue published online: 9 OCT 2014
- Article first published online: 10 AUG 2013
- Accepted manuscript online: 4 JUL 2013 11:24AM EST
- Manuscript Accepted: 26 JUN 2013
- Manuscript Revised: 19 JUN 2013
- Manuscript Received: 11 MAY 2012
- competitive strategy;
- dominant firm;
- natural experiment;
We study competition as an impetus for firms to reposition—to abandon their current positioning strategy and adopt a new one. We predict that as a strong firm moves closer, competition erodes the profitability of situated firms and prompts them to reposition. We expect this effect is pronounced the greater difference in competitive strength. However, we expect that countervailing forces exist such that the viability of alternative positions and the opportunity cost of abandoning a current position mitigate this effect. Evidence from a natural experiment in China's satellite television industry supports our hypotheses. This research adds to the existing literature on repositioning, which emphasizes the phenomenon as opportunity-driven, and to the competitive interaction literature, which typically does not distinguish between noncounterattack strategies. Copyright © 2013 John Wiley & Sons, Ltd.