• Abstract
• Antecedents To Temporary Advantage
• Management Of Temporary Advantage
• Research Landscape
• Highlights
• The Future Of Temporary Versus Sustainable Advantage: Mutually Exclusive Or Simultaneously Coexistent?
• Other Theories That Could Be Relevant
• Multi-Strategy

Abstract

The creation and management of temporary competitive advantages has emerged as an alternative to sustainable models of competitive advantage in the strategy literature. We review the literature and discuss questions related to the antecedents, consequences and the management temporary advantage in the introduction of this special issue. The overall goal is to ask: What would the field of strategic management look like if sustainable advantages did not exist? We summarize the papers published in this special issue and highlight directions for future research.

Antecedents To Temporary Advantage

Management Of Temporary Advantage

As the environment becomes more dynamic and disruptive through both exogenous and endogenous changes, it perhaps becomes appropriate to define strategy as dynamic maneuvering—moves and counter moves—rather than static positioning, such as resources, routines, capabilities, generic strategy, industry structure, strategic groups, etc. (Grimm, Lee, and Smith, 2005). When such a view is taken, the value and duration of a move perhaps lasts only as long as rivals do not outmaneuver it. The literature on the delay or rapidity of competitive response finds that industry leaders are dethroned more frequently than is commonly believed (Ferrier, Smith, and Grimm, 1999; Smith, Ferrier, and Grimm, 2001), that more aggressive firms are more successful (Ferrier, 2001; Ferrier et al., 2002) and that Red Queen competition exists whereby rival actions cut into the performance of the acting firm requiring new action to keep pace (D’Aveni, 1994; Derfus et al., 2008).

Research Landscape

Highlights

Rather than self-cannibalize and proactively pre-empt the market with the next new advantage, Pacheco-de-Almeida (2010) showed that it is often better to self-displace—that is, to voluntarily give up leadership of an industry. He observes that the magnitude and duration of the next advantage may be too short to earn more rents than by simply milking the old advantage.

Also in contrast to accepted wisdom, Chen et al. (2010) find that aggressive actions are not always the best way to precede in hypercompetitive or high velocity environments.

The Future Of Temporary Versus Sustainable Advantage: Mutually Exclusive Or Simultaneously Coexistent?

Studying the increased volatility of returns, declining impact of industry effects, and the relationship between rivalry and industry performance, Thomas (1996) and Thomas and D’Aveni (2009), argued that industries based on sustainable oligopolies were being replaced by industries that had become hypercompetitive.

Other Theories That Could Be Relevant

Waves carry energy and are disturbances in a medium, such as water, air, or space. The amplitude, duration, velocity, and periodicity of many different types of waves can all be described in mathematical equations. Some waves have shorter periods, travel faster, and dissipate sooner than others. The parameters of the wave formula define the period, frequency, and amplitude. With considerable empirical research, we could discover what influences the parameters in wave equations. We could visualize an industry with both long and short waves rippling through it. Thus, an industry would be represented by a series of wave equations (disruptions) with differing parameters, and the parameters would be based on the antecedents of advantages.

• Chaos theory may be another theory that has the capability to describe the existence of simultaneous coexistence of short- and long-term advantages (Gleick, 1988).
• Complexity theory or the theory of complex systems (Waldrop, 1992; Anderson, 1999) may add to the theory of temporary advantage by enabling the integration of literatures on hypercompetition, hypervelocity, hyperturbulence, and complex competitive dynamics. In addition
• We may discover that hypercompetition turns out to be a special case of Porter’s five forces (low barriers to entry and substitution, high power of buyers and suppliers, and rising industry rivalry). Some industry factors may still have residual effects over time, even though industry behavior is deteriorating.

Multi-Strategy

Finally, another emerging insight is that firms do not have just one strategy (D’Aveni, 2010). They may have a multiplicity of strategies —each strategy takes on rivals one at a time. In fact, in a world of temporary advantages, it may be rare to see a firm having just one strategy that universally applies across all rivals. A firm may have as many strategies as it has competitors. Yet the field of strategy still talks about firms as if they had just one strategy. Consequently, to understand temporary competitive advantages, we may need to move to the firm-dyad level of analysis