Linking hypercompetition and strategic group theories: strategic maneuvering in the US insurance industry

Avi Fiegenbaum, Howard Thomas and Ming-Je Tang
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Avi Fiegenbaum: Technion-Israeli Institute of Technology, Faculty of Engineering and Management, Technion City, Haifa, Israel, Postal: Technion-Israeli Institute of Technology, Faculty of Engineering and Management, Technion City, Haifa, Israel
Howard Thomas: Warwick Business School, Coventry CV4 7AL, UK, Postal: Warwick Business School, Coventry CV4 7AL, UK
Ming-Je Tang: Department of International Business, National Taiwan University, Taipei, Taiwan, ROC, Postal: Department of International Business, National Taiwan University, Taipei, Taiwan, ROC

Managerial and Decision Economics, 2001, vol. 22, issue 4-5, 265-279

Abstract: Focusing on the dynamics of strategic maneuvering, this paper draws parallels between the accumulated perspectives of strategic group theory and ideas drawn from evolutionary economics and from a recent strategy-oriented book on hypercompetition (D'Aveni RA. 1994. Hypercompetition: Managing the Dynamics of Strategic Maneuvering. The Free Press: New York). Using insurance industry data, the paper first uses the methodological framework of strategic groups to define competitive positioning and the identity of close competitors. It then develops a Markovian model to analyse two important aspects of strategic maneuvering over time: the level of firm movement, and the determination of optimal maneuvering paths and their related long-term performance. The results provide insights into industry competitive dynamics and rivalry. First, there is clear evidence of strategic maneuvering over the entire time period studied and a higher level of maneuvering in the long run. Second, for some competitive scenarios, there are optimal maneuvering trajectories that optimize a firm's long-term economic performance. Copyright © 2001 John Wiley & Sons, Ltd.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:22:y:2001:i:4-5:p:265-279

DOI: 10.1002/mde.1015

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