Download or read book Competitive Actions of New Technology Firms written by Robert L. Porter and published by . This book was released on 2010 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt: The competitive strategy used by a new firm may be the most important strategy it ever employs (Covin & Slevin, 1989; Ferrier, 2001). A well-chosen and executed firm strategy is essential for a firm to realize its potential competitive advantage (Porter, 1981). A firm's strategic intent and resulting competitive actions are especially important when firms are new and vulnerable as they strive to learn which strategic actions help them adapt to their rivals actions and to their environment (Stinchcombe, 1965). Further, the competitive actions that new firms choose to take with rival firms affects the overall competitive dynamics of their industry (Smith, Ferrier, and Ndofor, 2001). One way to explore how the competitive actions of new firms affect their future is to capture and examine their individual competitive moves and countermoves over time (Smith, Grimm, Gannon, & Chen, 1991). Red Queen competition is a particular form of competitive dynamics that is well-suited to explore these issues of new rival firms (Barnett, 2008). Barnett and Sorenson (2002) suggested that competition and learning reinforce one another as organizations develop, and this is what van Valen (1973) referred to as the 'Red Queen.' This definition of the Red Queen led to the development of the concept of Red Queen competition and the Red Queen effect. The competitive strategies these new firms use to obtain resources as they adapt, in particular how these firms compete and or cooperate, are key competitive strategies that remain understudied to-date (Amit, Glosten, and Muller, 1990). I explore Red Queen competition, and the ensuing Red Queen Effect, in a complex environmental setting that represents a high technology ecosystem (Arned, 1996, 2010; Iansiti & Levien, 2004a, 2004b; Moore, 1993; Pierce, 2009). New firms in such an ecosystem represent a particularly salient combination of type of firm, firm lifecycle period, and firm environment to examine strategic actions since these firms comprise a significant portion of the high-growth and future of our global economy (Stangler, 2010). Further, due to their need to rapidly adapt in a complex ecosystem, these firms rely heavily on short-lived information resources for competitive advantage (Barney, 1991; Nelson and Winter, 1982; Omerzel, 2008). To place this research in context, I consider the moderating effects of key environmental ecosystem resource conditions (Dess & Beard, 1984; Miller & Friesen, 1983; Sharfman & Dean, 1991). Empirical studies to-date have yielded mixed results and left unanswered questions about the basic components and the effects of Red Queen competition. To address these issues I explore this literature in chapter one of the dissertation, and in chapter two I develop a theoretical model of Red Queen competition that draws on the available empirical and theoretical literature to-date. Due to the mixed finding from the empirical results, I develop a precise agent-based simulation model of Red Queen competition in chapter three to facilitate data collection. Using this data I test a series of hypotheses designed to explore the fundamentals of Red Queen competition, specifically how escalating competitive activity for resources among new firms impacts their survival and performance. In addition, the moderating effect of environmental changes on Red Queen competition is also tested to explore the affect of context on Red Queen competition. Chapter four explains the findings from these hypotheses, future research directions, implications and limitations from the research, and my concluding thoughts.