Incumbent Responses to an Entrant with a New Business Model: Resource Co-Deployment and Resource Re-Deployment Strategies

The constructs of re-deployment and co-deployment have been central to discussions of scope economies in diversified firms. We argue however that these constructs are also significant in the context of single business firms. Increasingly, changes in technology and demand preferences have provided opportunities for entrants to attack incumbents with a different business model, one that may neutralize the incumbent’s advantage for at least some set of customers (e.g. Netflix versus Blockbuster). In such a context incumbents often respond by modifying their business model. We note that several of the business model-altering responses of the incumbent can be characterized in terms of co-deployment and re-deployment benefits and costs, where co-deployment benefits/cost apply to the scope economies/diseconomies in running multiple business-models within the same firm and re-deployment benefits/costs apply to the implications of moving assets from one business model to another. We then examine the set of strategic choices faced by the incumbent in competing with an entrant with a different business model. We identify five set of factors that are likely to influence the decision to choose between these alternatives – uncertainty spawned by the new business model, market segment targeted by the new model, the within-business-across-business-model co-deployment and re-deployment benefits and costs, the across-business co-deployment and re-deployment benefits and costs, and the incumbent’s prior performance history. Although some of these choices have seen some work, most remain relatively underexplored in the strategy literature. We highlight the potential for research in this area with a set of propositions that identify key conditions that should hold true for a particular strategic choice to be picked by an incumbent

How a firm's domestic footprint and domestic environmental uncertainties jointly shape added cultural distances : the roles of resource dependence and headquarters attention

Even though many firms conduct most of their business domestically, international management research has remained remarkably silent on the role of a firm's domestic footprint in its internationalization strategy. We shed light on that role by exploring how the size of a firm's domestic footprint influences the cultural distance that the firm adds to its country portfolio when expanding internationally. Integrating resource dependence theory and the attention‐based view, we hypothesize that a firm's domestic footprint has a negative relationship with added cultural distance (ACD), and that domestic policy uncertainty strengthens this relationship whereas domestic demand uncertainty weakens it. We find robust support for our hypotheses in a sample of the world's largest retailers covering the period 2000–07, indicating that a firm's domestic footprint and domestic environmental uncertainties jointly shape cross‐cultural expansion strategies. Our findings suggest that ACDs reflect headquarters executives' desire to avoid ineffective foreign expansions, hinting at possible biases in studies of the performance effects of distance

An effective scalable SQL engine for NoSQL databases

NoSQL databases were initially devised to support a few concrete extreme scale applications. Since the specificity and scale of the target systems justified the investment of manually crafting application code their limited query and indexing capabilities were not a major im- pediment. However, with a considerable number of mature alternatives now available there is an increasing willingness to use NoSQL databases in a wider and more diverse spectrum of applications and, to most of them, hand-crafted query code is not an enticing trade-off. In this paper we address this shortcoming of current NoSQL databases with an effective approach for executing SQL queries while preserving their scalability and schema flexibility. We show how a full-fledged SQL engine can be integrated atop of HBase leading to an ANSI SQL compli- ant database. Under a standard TPC-C workload our prototype scales linearly with the number of nodes in the system and outperforms a NoSQL TPC-C implementation optimized for HBase.(undefined

Investments in recessions

We argue that the strategy literature has been virtually silent on the issue of recessions, and that this constitutes a regrettable sin of omission. A key route to rectify this omission is to focus on how recessions affect investment behavior, and thereby firms stocks of assets and capabilities which ultimately will affect competitive outcomes. In the present paper we aim to contribute by analyzing how two key aspects of recessions, demand reductions and reductions in credit availability, affect three different types of investments: physical capital, R&D and innovation and human- and organizational capital. We point out that recessions not only affect the level of investment, but also the composition of investments. Some of these effects are quite counterintuitive. For example, investments in R&D are more sensitive to credit constraints than physical capital is. Investments in human capital grow as demand falls, and both R&D and human capital investments show important nonlinearities with respect to changes in demand

Economic liberalization and the antecedents of top management teams: evidence from Turkish 'big' business

There has been an increased interest in the last two decades in top management teams (TMTs) of business firms. Much of the research, however, has been US-based and concerned primarily with TMT effects on organizational outcomes. The present study aims to expand this literature by examining the antecedents of top team composition in the context of macro-level economic change in a late-industrializing country. The post-1980 trade and market reforms in Turkey provided the empirical setting. Drawing upon the literatures on TMT and chief executive characteristics together with punctuated equilibrium models of change and institutional theory, the article develops the argument that which firm-level factors affect which attributes of TMT formations varies across the early and late stages of economic liberalization. Results of the empirical investigation of 71 of the largest industrial firms in Turkey broadly supported the hypotheses derived from this premise. In the early stages of economic liberalization the average age and average organizational tenure of TMTs were related to the export orientation of firms, whereas in later stages, firm performance became a major predictor of these team attributes. Educational background characteristics of teams appeared to be under stronger institutional pressures, altering in different ways in the face of macro-level change

Universal Rights and Wrongs

This paper argues for the important role of customers as a source of competitive advantage and firm growth, an issue which has been largely neglected in the resource-based view of the firm. It conceptualizes Penrose’s (1959) notion of an ‘inside track’ and illustrates how in-depth knowledge about established customers combines with joint problem-solving activities and the rapid assimilation of new and previously unexploited skills and resources. It is suggested that the inside track represents a distinct and perhaps underestimated way of generating rents and securing long-term growth. This also implies that the sources of sustainable competitive advantage in important respects can be sought in idiosyncratic interfirm relationships rather than within the firm itself

On the expressiveness and trade-offs of large scale tuple stores

Proceedings of On the Move to Meaningful Internet Systems (OTM)Massive-scale distributed computing is a challenge at our doorstep. The current exponential growth of data calls for massive-scale capabilities of storage and processing. This is being acknowledged by several major Internet players embracing the cloud computing model and offering first generation distributed tuple stores. Having all started from similar requirements, these systems ended up providing a similar service: A simple tuple store interface, that allows applications to insert, query, and remove individual elements. Further- more, while availability is commonly assumed to be sustained by the massive scale itself, data consistency and freshness is usually severely hindered. By doing so, these services focus on a specific narrow trade-off between consistency, availability, performance, scale, and migration cost, that is much less attractive to common business needs. In this paper we introduce DataDroplets, a novel tuple store that shifts the current trade-off towards the needs of common business users, pro- viding additional consistency guarantees and higher level data process- ing primitives smoothing the migration path for existing applications. We present a detailed comparison between DataDroplets and existing systems regarding their data model, architecture and trade-offs. Prelim- inary results of the system's performance under a realistic workload are also presented

An integrative framework of preemption strategies

Pre-print; author's draftThis paper performs a review of the various pre-emption strategies prescribed in the economics literature. These are cost superiority, consumers' switching cost, channel exclusivity, environmental barriers of entry and credible commitment to react aggressively. Through our analysis, we develop an integrative framework of the pre-emption strategies that will result in long-term payoffs to the firm. The framework proposes that there are two key dimensions—strategic advantage and strategic focus—and identify five generic types of pre-emption strategies for market incumbents. These are the switching cost, blockade, credible commitment, tie-up, and cost leadership strategies. The pre-emption strategies and the framework presented can assist managerial decision-making for the successful pre-emption of potential competition to complement their existing efforts

On the Benefits of Transparent Compression for Cost-Effective Cloud Data Storage

International audienceInfrastructure-as-a-Service (IaaS) cloud computing has revolutionized the way we think of acquiring computational resources: it allows users to deploy virtual machines (VMs) at large scale and pay only for the resources that were actually used throughout the runtime of the VMs. This new model raises new challenges in the design and development of IaaS middleware: excessive storage costs associated with both user data and VM images might make the cloud less attractive, especially for users that need to manipulate huge data sets and a large number of VM images. Storage costs result not only from storage space utilization, but also from bandwidth consumption: in typical deployments, a large number of data transfers between the VMs and the persistent storage are performed, all under high performance requirements. This paper evaluates the trade-off resulting from transparently applying data compression to conserve storage space and bandwidth at the cost of slight computational overhead. We aim at reducing the storage space and bandwidth needs with minimal impact on data access performance. Our solution builds on BlobSeer, a distributed data management service specifically designed to sustain a high throughput for concurrent accesses to huge data sequences that are distributed at large scale. Extensive experiments demonstrate that our approach achieves large reductions (at least 40%) of bandwidth and storage space utilization, while still attaining high performance levels that even surpass the original (no compression) performance levels in several data-intensive scenarios

Implementation and effects of user participation in playground management: a comparative study of two Swedish municipalities

This paper describes and analyses how customer orientation strategies, with the focus on user participation, are implemented in playground management and their effects on managers’ attitudes and work with physical playgrounds. A comparative case study was conducted in two Swedish municipalities that involve users in different ways: through a manager-driven participation process and through informal user-initiated dialogue. The empirical material consisted of qualitative interviews with professionals in the management organisations and studies of local playgrounds. Implementation of strategies for user participation and tactical management activities appeared to be of importance. The manager-driven participation strategy was associated with a particularly positive attitude among managers, but also difficulties such as maintaining continuous dialogue with users. The small differences found in playground provision between the two municipalities give reason to question the physical effects of participation processes, and show the need for further research