Industry variety and performance
Article first published online: 8 NOV 2006
Copyright © 1993 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 14, Issue 3, pages 163–177, March 1993
How to Cite
Miles, G., Snow, C. C. and Sharfman, M. P. (1993), Industry variety and performance. Strat. Mgmt. J., 14: 163–177. doi: 10.1002/smj.4250140302
- Issue published online: 8 NOV 2006
- Article first published online: 8 NOV 2006
- Manuscript Revised: 6 NOV 1992
- Manuscript Received: 6 JUN 1991
- strategic groups;
This study advances a nascent perspective in the strategic management literature: a focus on the beneficial effects of competition among firms in an industry. Such a perspective supplements the traditional view of competition as firm rivalry. The overall purpose of the study is to provide a theoretical foundation for the study of the mutual gains associated with industry competition. Because of its importance to several different organizational theories, the concept of variety is examined as a potential source of interfirm benefits. The influence of variety is observed in 12 industries, four each from the growth, mature, and decline stages of the life cycle. In each life-cycle stage, two of the industries have substantial amounts of foreign competition while the other two do not. The study's results support two broad conclusions. First, industry variety and performance are positively related, suggesting that interfirm benefits are most feasible in industries characterized by diversity among firms' competitive strategies. Second, as industries move through the life cycle, variety decreases, implying that both strategists and policymakers need to consider the impact on aggregate variety when evaluating prescriptions for the revitalization of declining industries. Implications of these findings are derived for researchers, practitioners, and policymakers.