Content area
Full Text
Received 5 August 1996
Final revision received 30 July 1999
Key words: generic strategy; competitive strategy; meta-analysis
The dominant paradigm of competitive strategy is now nearly two decades old, but it has proved difficult to assess its adequacy as a descriptive system, or progress its propositions about the performance consequences of different strategic designs. It is argued that this is due to an inability to compare and cumulate empirical work in the field. A meta-analytic procedure is proposed by which the empirical record can be aggregated. Results suggest that, although cost and differentiation do act as high-level discriminators of competitive strategy designs, the paradigm's descriptions of competitive strategy should be enhanced, and that its theoretical proposition on the performance of designs has yet to be supported. A considerable agenda for further work suggests that competitive strategy research should recover something of its former salience. Copyright (C) 2000 John Wiley & Sons, Ltd.
INTRODUCTION
Michael Porter's theory of generic competitive strategy is unquestionably among the most substantial and influential contributions that have been made to the study of strategic behavior in organizations (Porter, 1980, 1985). In essence, the theory contains two elements: first, a scheme for describing firms' competitive strategies according to their market scope (focused or broad), and their source of competitive advantage (cost or differentiation); and, second, a theoretical proposition about the performance outcomes of these strategic designs: that failure to choose between one of cost- or differentiation-leadership will result in inferior performance, the so-called 'stuck-in-the-middle' hypothesis.
Within a few years of publication, the theory was recognized as the dominant paradigm of competitive strategy (Hill, 1988; Murray, 1988). But, despite widespread interest and application, it has proved difficult to progress its representation of competitive behavior. In Kuhn's account, a paradigm gives a common platform and focus to subsequent empirical and theoretical investigation; it defines the scope of phenomena that are deemed to be important, and the methods used for investigation; and it becomes the received wisdom that is taught in the subject's textbooks (Kuhn, 1962). In the following paragraphs it will be shown that Porter's theory has played all these roles.
But it is the thesis of this paper that the paradigm has so far failed to open up a period...