Competition Reference Points in a Mature Industry

• In Event: Open Refereed Roundtables
  In Refereed Roundtable (90 minute): Table 3: Economic and Organizational Sociology

Abstract

Optimal distinctiveness describes a strategy where a company maintains a balanced level of differentiation from industry norms, aiming to meet the dual demands of uniqueness and compliance. This concept has recently become more recognized in research as a general positioning approach. However, clarity about optimal distinctiveness across different stages of industry development and the appropriate criteria for differentiation is still lacking. To address this, we propose that firms in a mature industry phase should use the prototypes of their specific strategic groups as benchmarks rather than relying on the overall industry prototype. This approach is advantageous because group prototypes enable companies to better understand the varied competitive environment and the legitimacy challenges within their strategic group, facilitating the management of the balance between conformity and differentiation. Our analysis, grounded in a comprehensive dataset from the Canadian property and casualty insurance sector spanning 2000 to 2020, provides robust support for this viewpoint.

Authors

• Huajie Shen, Guangxi Uuniversity, China

• Stan Xiao Li