Compositional Advantage and Strategy

    Research output: Working paperResearch

    Abstract

    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.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherAsia Research Community, CBS
    Number of pages36
    Publication statusPublished - 2016
    SeriesCopenhagen Discussion Papers
    Number63
    ISSN0904-8626

    Keywords

    • Composition
    • Advantage
    • Strategy
    • Value/price ratio
    • Key success factor
    • Asymmetry

    Cite this

    Li, X. (2016). Compositional Advantage and Strategy. Frederiksberg: Asia Research Community, CBS. Copenhagen Discussion Papers, No. 63
    Li, Xin. / Compositional Advantage and Strategy. Frederiksberg : Asia Research Community, CBS, 2016. (Copenhagen Discussion Papers; No. 63).
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    Li, X 2016 'Compositional Advantage and Strategy' Asia Research Community, CBS, Frederiksberg.

    Compositional Advantage and Strategy. / Li, Xin.

    Frederiksberg : Asia Research Community, CBS, 2016.

    Research output: Working paperResearch

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    Li X. Compositional Advantage and Strategy. Frederiksberg: Asia Research Community, CBS. 2016.