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In this paper, I first critique the composition-based view of Yadong Luo and John Child for understanding how resource-poor firms survive and thrive. To remedy the deficiencies in their perspective, I then propose a dynamic theory of compositional advantage and strategy. Here, the compositional advantage is redefined as the attractiveness of the composition of the producer’s offering in terms of scope and perceived value/price ratio. I identify five ways or basic compositional strategies to improve the value/price ratio. A firm may have an overall compositional strategy that is composed of some or all of the five basic compositional strategies. I argue there are three indispensable key success factors for a composition-based competition, i.e., aspiration (ambition-position asymmetry), attitude (being ALERT), and action (turning asymmetry into advantage). I also discuss the particular relevance of the present theory to understanding Chinese firms. I conclude with managerial implications and suggestions for future research.

Publication information

Original languageEnglish
Publication date2016
Number of pages18
StatePublished - 2016
Event - Hangzhou, China

Conference

ConferenceThe Seventh Biennial International Association for Chinese Management Research Conference
Number7
CountryChina
CityHangzhou
Period15/06/201619/06/2016
Internet address

ID: 44849330