Scanning dynamic competitive landscapes: A market-based and resource-based framework

Margaret A. Peteraf, Mark E. Bergen

Research output: Contribution to journalArticlepeer-review

344 Scopus citations

Abstract

Heterogeneity among rivals implies that each firm faces a unique competitive set, despite overlapping market domains. This suggests the utility of a firm-level approach to competitor identification and analysis, particularly under dynamic environmental conditions. We take such an approach in developing a market-based and resource-based framework for scanning complex competitive fields. By facilitating a search for functional similarities among products and resources, the framework reveals relevant commonalities in an otherwise heterogeneous competitive set. Beyond its practical contribution, the paper also advances resource-based theory as a theory of competitive advantage. Most notably, we show that resource substitution conditions not only the sustainability of a competitive advantage, but the attainment of competitive advantage as well. With equifinality among resources of different types, the rareness condition for even temporary competitive advantage must include resource substitutes. It is not rareness in terms of resource type that matters, but rareness in terms of resource functionality.

Original languageEnglish (US)
Pages (from-to)1027-1041
Number of pages15
JournalStrategic Management Journal
Volume24
Issue number10 SPEC ISS.
DOIs
StatePublished - Oct 2003

Keywords

  • Competitive advantage
  • Competitor identification
  • Resource-based theory

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