The Effect of Strategic Heterogeneity among Competitors on Firm Performance

This paper contributes to competitor analysis literature by studying the influence of strategic heterogeneity among competitors on firm performance. We argue that diversity among rivals increases the number of strategic options that a firm can learn from, and reduces the effectiveness with which it is able to adjust its strategy to them. To develop our arguments be borrow from learning, contingency and population ecology perspectives. In addition, we explore how changes in the strategies implemented by rivals moderate the effect that the strategic heterogeneity among competitors has on performance. Consequently, our model simultaneously analyzes the effect of static heterogeneity (diversity among rivals at a point in time) and the moderating influence of dynamic heterogeneity (the strategic variety that comes from changes along time).