Matches between network structure and competitive strategies Online publication date: Tue, 10-Dec-2019
by Xuefeng Liu; Kenv Yu; Xuefeng Liu
International Journal of Technology, Policy and Management (IJTPM), Vol. 19, No. 4, 2019
Abstract: Drawing on social network theory and Porter's competitive strategy analysis consistent with extant literature, this study investigates characteristics that leverage the matches between network structure and competitive strategies and explores if the combination of effects can also influence firms' performance. Using data from a special unit within Chinese floricultural cluster, we test the interaction effects between network structure (measured by centrality, structural holes and key ties) and competitive strategies (cost leadership strategies and differentiation strategies) Results show that inter-firm networks with a high degree of centrality should be matched with cost leadership strategies. In addition, these findings indicate that key ties, which may affect how firms process non-redundant resources are a great help to execute cost leadership strategies but are detrimental to the effectiveness of differentiation strategies. Managerial implications and directions for future research are discussed.
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