Towards a Theory of Competitive Progression: Evidence from High-Tech Manufacturing

Authors

  • Eve D. Rosenzweig,

    Corresponding author
    1. The Goizueta Business School, Emory University, 1300 Clifton Road NE, Atlanta, Georgia 30322, USA
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  • Aleda V. Roth

    Corresponding author
    1. The Kenan-Flagler Business School, The University of North Carolina at Chapel Hill, Campus Box 3490, McColl Building, Chapel Hill, North Carolina 27599-3490, USA
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*The Goizueta Business School, Emory University, 1300 Clifton Road NE, Atlanta, Georgia 30322, USA, Eve_Rosenzweig@bus.emory.edu

4rotha@bschool.unc.edu

Abstract

This study replicates and extends Ferdows and De Meyers' observed ‘sand cone’ model of cumulative competitive capabilities by means of Roth's related competitive progression theory (CPT). Using path analysis, we model and test the relationships among the generic competitive capability constructs of conformance quality, delivery reliability, volume flexibility, and low cost as predicted by CPT. Our results, drawn from a sample of high-tech manufacturers, provide further evidence that on average, these four capabilities are acquired both cumulatively and in that sequence. We also find that each generic capability increases operational know-how and reduces non-value-added directly and/or indirectly through the enhancement of successive capabilities in the progression, which in turn improves profitability. The paper contributes a theoretical rationale for the observed sand cone effect, describes how the competitive progression acts to influence accelerated organizational learning over an innovation cycle, and offers evidence that combinative capabilities have strategic value for high-tech manufacturers.

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