Session 325

Product Scope Strategy in Different Empirical Contexts

Track F

Date: Monday, September 22, 2014


Time: 16:30 – 17:45


Room: Lisboa

Session Chair:

  • Yongwook Paik, Washington University in St. Louis

Title: Antecedents of New Entrant's Product Scope Strategy: Evidence from the U.S. Hospital Industry


  • Yongwook Paik, Washington University in St. Louis
  • Joonmahn Lee, Purdue University

Abstract: A firm's product scope strategy within its industry is one of the most fundamental concepts in strategic management and entrepreneurship and is particularly important for new entrants. Although the extant literature has focused on the performance implications of firms' product scope positioning (e.g. focus strategy), we still know little about how firms choose their product scope strategy in the first place. We address this important gap by examining the antecedents of new entrants’ product scope strategies. We argue that a new entrant’s product scope strategy depends on internal firm characteristics, such as pre-entry history (or the lack thereof) and the firm's profit orientation, along with the external market environment. Using the U.S. hospital industry as our empirical setting, we find strong support for our hypotheses.

Title: Competitive Intensity as a Constraint on Diversification and Performance in Technology Intensive Industries


  • Grigorij Ljubownikow, University of Auckland
  • Siah Hwee Ang, Victoria University of Wellington

Abstract: This paper analyzes how competitive intensity impacts diversification and influences the relationship between diversification and firm performance for firms in technology intensive environments. Using data on firms in technology intensive industries in the UK manufacturing sector, this study shows that for firms in technology intensive industries, competitive intensity is negatively related to diversification. At higher levels of competitive intensity, competitive intensity negatively moderates the relationship between diversification and performance. These findings suggest that in technology intensive environments firms’ diversification behaviors and outcomes are strongly affected and constrained by the competition they face. This contributes towards clarifying the role competition plays in diversification decisions.

Title: Diversified or Focused: Which Strategy Suits Family Managers


  • Christian Stadler, University of Warwick
  • Michael Mayer, University of Bath
  • Julia Hautz, University of Innsbruck
  • Kurt Matzler, Free University of Bozen-Bolzano

Abstract: This paper explores the impact of family management on performance in relation to the firm’s diversification strategy. Using a dataset of 292 German firms from 2000 to 2009 we find that family members are better placed to manage focused rather than diversified firms, as they may not have the expertise, skills and capabilities to manage the complexity of the latter. This relationship is moderated by the level of international diversification. Managers face similar challenges in product and international diversification. Hence higher levels of international diversification allow family managers of diversified firms to develop and leverage capabilities which reduce their negative impact on performance. In focused firms, in contrast, internationalization introduces new challenges without generating the same benefits and reduces the positive impact of family managers on performance.

Title: Where Are the Promised Economies of Scope? Disentangling Synergy Gains and Coordination Costs in a Growth Strategy through Product Variety


  • Jorge Tarzijan, Catholic University of Chile
  • Francisco Brahm, University of Cambridge
  • Marcos Singer, Pontifical Catholic University of Chile

Abstract: In this study we contribute to the empirical assessment of the tradeoffs between the incremental benefits and costs of a product variety strategy based on resource sharing using a very detailed database of a major beer producer that sequentially expanded its product lines to soft drinks, wines, spirits, and sweets. After addressing endogeneity concerns we show that the addition of product lines increases both the productivity and the coordination costs, and that once a certain threshold level is reached, the additional coordination costs surpass the additional benefits. By discussing the limits to economies of scope and assessing the role of productivity increases and coordination costs, we make a contribution to the analysis of the intra-firm diversification research.

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 400: Teaching Corporate Strategy: Insights and Opportunities
Sun: 11:15 – 12:30
Session 401: Research Synergies in Corporate Strategy and Entrepreneurship
Sun: 15:45 – 17:00
Session 398: Corporate Strategy and Corporate Finance: Continuing the Research Conversation
Sun: 17:15 – 18:30
Session 602: Corporate Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 308: How do firms grow? Canvasing Different Perspectives
Session 316: Acquisitions and Divestures: Antecedents and Consequences
Mon: 11:00 – 12:15
Session 319: International Corporate Strategy
Mon: 14:45 – 16:00
Session 437: Corporate Structure, Resource allocation, and Portfolio planning
Mon: 16:30 – 17:45
Session 325: Product Scope Strategy in Different Empirical Contexts
Tue: 08:00 – 09:15
Session 327: Market Response to M&A
Tue: 11:00 – 12:15
Session 328: New Angles of Examining Acquisition Strategies
Tue: 15:30 – 16:45
Session 399: The Role of Industry/Environmental Conditions in Corporate Strategy
Tue: 17:15 – 18:30
Session 318: The Boundary of the Firm

Strategic Management Society