TY - JOUR
T1 - Competitors matter
T2 - How competitors' actions moderate the influence of firm profitability on the prioritization between growth and efficiency increase
AU - Hutzschenreuter, Thomas
AU - Borchers, S. Alexander
AU - Harhoff, Philippa Luisa
N1 - Publisher Copyright:
© 2020 The Authors. Managerial and Decision Economics published by John Wiley & Sons Ltd
PY - 2021/3
Y1 - 2021/3
N2 - Firms have been shown to prioritize between growth and efficiency increase sequentially depending on their level of profitability. Adding arguments from the attention-based view to this discussion, we hypothesize that actions of competitors in the marketplace could moderate this relationship. Using data from business simulations, we specifically test whether the influence of firm profitability on the prioritization decision varies with changes in competitor products' pricing, promotion, and quality. Our analysis reveals that product promotion intensifications of competitors strengthen the positive relationship between firm profitability and the prioritization of growth relative to efficiency increase, whereas product price reductions weaken this relationship.
AB - Firms have been shown to prioritize between growth and efficiency increase sequentially depending on their level of profitability. Adding arguments from the attention-based view to this discussion, we hypothesize that actions of competitors in the marketplace could moderate this relationship. Using data from business simulations, we specifically test whether the influence of firm profitability on the prioritization decision varies with changes in competitor products' pricing, promotion, and quality. Our analysis reveals that product promotion intensifications of competitors strengthen the positive relationship between firm profitability and the prioritization of growth relative to efficiency increase, whereas product price reductions weaken this relationship.
UR - http://www.scopus.com/inward/record.url?scp=85092340413&partnerID=8YFLogxK
U2 - 10.1002/mde.3238
DO - 10.1002/mde.3238
M3 - Article
AN - SCOPUS:85092340413
SN - 0143-6570
VL - 42
SP - 326
EP - 342
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
IS - 2
ER -