Racing for market share: Hypercompetition and the performance of multiunit multimarket firms

Abstract

Research linking firms' hypercompetitive strategic actions and performance focuses on firm level performance, and assumes that the impact of each firm's strategic actions affects only a limited number of other firms. We advance a complementary perspective for multiunit-multimarket firms in which the action performance linkage operates at the market-unit level (i.e. within a specific geographic product or service market), and strategic actions within a market-unit are assumed to affect all other firms participating in that market-unit. Supporting the perspective, our analysis of Canadian insurance firms shows that these firms' performance in a marketunit depends on the number and simplicity of their strategic actions in that market unit - both absolutely and vis-d-vis those of others competing in the market unit. Our study offers new insight into how multiunit-multimarket firms compete across a series of market-units - and how they can compete more effectively.

Citation

Xiao Li, S. and Chuang, Y.-T. (2001), "Racing for market share: Hypercompetition and the performance of multiunit multimarket firms", Baum, J.A.C. and Greve, H.R. (Ed.) Multiunit Organization and Multimarket Strategy (Advances in Strategic Management, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 329-355. https://doi.org/10.1016/S0742-3322(01)18012-5