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Department of Industrial Management Najafabad branch, Islamic Azad University, Isfahan, Iran.
Department of Management Dehaghan branch, Islamic Azad University, Isfahan, Iran.
Department of Industrial Management Najafabad branch, Islamic Azad University, Isfahan, Iran.
AR TIC LE INF O
AB STR AC T
Keywords:
Competitive advantages have been studied as one of the most controversial and challenging topics
in the field of strategic management the dimensions and diffe rent approaches. Spite of extensive
efforts to explain the concept, can stated that it is the still one of the most mysterious expressions
used in the management literature Especially in relation to the industry is based on advanced
technology. In this article researcher with review existing literature in the field theories competitive
advantage and based industries advanced technologies, Following Explain the theory of
competitive advantage Introducing methods and features distinguishing advanced technologybased industries from other industries, compare the theory with based industries advanced
technologies and finally introduced and choose the theory of competitive advantage in this area.
2013 Int. j. econ. manag. soc. sci. All rights reserved for TI Journals.
1.
Introduction
Rapid changes environmental, increasingly changes at level competitors activity, organizations active is encountered in the field of
competition with the major change in the response to these developments. Hence, today called a new global economy, it is used for describe
to be at this new position organizations. Three main elements of modern economic, globalization, advanced technology based on
knowledge and new technologies of information and communication and networking has predominantly intellectual and at the opposite,
modern industrial economy has the nature physical that of this approach will be quite different than the traditional economy. Due to the the
increasing role technology-based industries and rapid growth of this industry globally and particularly in developing countries and efforts
developing countries order to attain this industry to today's competitive position.
2.
Research generalities
3.
Review literature
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Int ernational Journal of Economy, Mana ge ment and Soci al Sci ences , 2(10) October 2013
Adam Smith concept of "absolute privilege" to use, meaning that each country will export the commodity that to produce with least cost.
In his book "The Wealth of Nations", did not said of international trade and comparative advantages. To opinion Smith, the division of
labor and specialization, is the most important factor economic growth and benefit the countries is that to produce goods and services that
cost less than other countries. If a country can produce all the products needed to make low price, of trade with other countries can not
benefit from international trade [1].
David Ricardo in amend the view, the issue of "comparative advantage" the introduced. Market factors, the country's resources are directed
to industries that the country they have the highest relative productivity. Ricardo's theory, of trade is based on differences in labor
productivity in different countries. He this topic did explain about differences in context prevailing in in different countries in various fields
related to the industries. Ricardo chooses the right direction, but mainly was used in industries that were hired semi-skilled and unskilled
labor [2].
3.1.2 Definition of Competitive Advantage
The concept of competitive advantage can be introduced one of the most ancient concepts of economics and the evolution the can follow to
the presents concept absolute advantage by Adam Smith and theory of comparative advantage provided by Ricardo until the present. Due to
this long time, various definitions is presented by scholars for clarify the concept of competitive advantage. Competitive advantage is
unique position against for an organization's rivals with the efficient use of resources, it is caused most widely [3]. Competitive advantage
collection organization unique features that allows it that better performance than their show competitors and competitors are not easily
able to simulate [4]. Competitive advantage for the organization's ability to provide the products its customers that is they know the more
valuable of the competitors provide Similar cases [5].
3.1.3 Theories of competitive advantage
3.1.3.1 Theory of Industrial Organization (IO)
Given that economic experts this theory, have studies from different perspectives, industrial organization theory literature are unable to
produce a comprehensive theory of competitive advantage, and hence in the present study was tried to in introducing and provide a brief
description of each of these approaches is the theory of industrial organization[6].
-
Microeconomic perspective
Industrial organization theories are mainly influenced by the neoclassical theory of perfect competition, monopoly and multiple monopoly.
Based on this framework, the structure of an industry, depending on the number of active vendors in the industry, On the one hand, market
monopoly that just a large firm active, with is high focus degree And in the other hand, full competition is with a large number of firms
active in competition with the industry and with the degree of high competition. Business strategy includes two aspects to this view:
(A). Pricing is the most important factor in investigating behavior of a firm.
(B). performance of that includes is product marketing performance R & D [6].
-
In this view, emphasizing the elements of the industry structure, beyond the issue of microeconomics has been efforts about Industrial
development organization. The elements include is industry life, buyers and potential suppliers, goods substitutes and complementary, the
degree of product differentiation, number of firms and their size, market share key competitors, intensity of barriers to entry, degree of
vertical integration and diversification of products and services, and how the government regulations, cultural, social, demand tensile,
change in market share over time, changes in market demand over time, the structure type competition in international markets, investment,
opportunity cost, fee structure, the speed of technological change. This view focused on reinforcing factors for of competition and hence
could be very useful in the understanding competition and competitive strategy [7].
-
Recently, several studies have been conducted in which the firm is taken into consideration as the unit of analyze. Features and strategies
such, size firm, advertising costs and costs associated with research and development, industry structure variables as determinants of firm
performance of is considered. Preliminary study on this issue has been done largely on relationship between firm performance and market
share. With development of the theoretical literature, the effects characteristics other and strategies firm are also was evaluated firm
performance [8].
-
Michael Porter (1985) knew five factors in analyzing necessary industry. The effect of these five factors on each other, defines the intensity
of competition in one industry. The collective strength the forces business is determinant the ultimate profitability potential. Porter believes
that all organizations are looking to profit and factor which profit level will determine, is the intensity of competition and if intensity of
competition is set, as well as profitability are determined. In this regard, the task of strategic management is the topical search in industry
which the organizations able to defend himself against these forces. Many researchers in the field of strategic management through the
famous five-forces model with an industrial organization economics have been acquainted. This model, the bulk of the industrial
organization research has been arrived to field of strategic management. Industry structure is main determinant and competitive positioning
in the industry. However, the industrial organization approach has advantages and limitations. One of the major debates is that the business
environment is increasingly dynamic and industry structure factors are changing rapidly[9].
Explain the Theory of Competitive Advantage and Comparison with Industries based on Advanced Technology
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Internat ional Jour nal of Economy, Mana ge ment and Social Sciences , 2(10) October 2013
Threat of new
entrants into the
industry
Bargaining power
of suppliers
Existing
competitors
Bargaining power
of buyers
Threat of substitute
products
Porter's competitive forces model to analyze current and long-term commitments are based on the results of these analyzes which may lead
to a weak position for the organization future because the rapid changes occurring in some industries. Problems Porter's model is assumed
that the industry is in a state of balance and a sustainable competitive advantage, but in today's world, reliance solely on yesterday's actions,
even outcomes may lead to failure in the future [8].
3.1.3.2 Resource-based theory
Resource-based theory refers to a set of firm-specific resources is will determine which companies has competition better and has more
performance. This approach emphasizes on the company's strategic resources. Strategic company resource including is physical resources,
human resources and organizational resources Etc that such as capabilities, organizational processes, knowledge, information, reputation,
that it is valuable and costly to replace and imitation [10]. Strategic resources themselves are the source of competitive advantage and
challenge managers is the in the identification and management of resources [2]. From an economic perspective, the resource-based theory
stems of Ricardo's economic attitudes. Evolution reviews suggests that the most effects theoretical is work as "resources and sustained
competitive advantage" by Barney [11].
Sustained competitive
advantage
Heterogeneity Essential
resources
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Int ernational Journal of Economy, Mana ge ment and Soci al Sci ences , 2(10) October 2013
Factors
Description
Historical conditions favored that organization development and obtained of their resources
under what conditions, a factor difficult to mimic competitors. This means that competitors
should to obtain with advantages the same the source, additional charges will be incurred.
This likelihood of success in obtaining competitive advantage competitor lowers
Causal ambiguity
Social complexity
Imitation of intangible resources is impossible like individuals and computer systems that
are dependent on interactive factors. Emulator should destroy their the current system and
reconstruct again with a new composition.
Explain the Theory of Competitive Advantage and Comparison with Industries based on Advanced Technology
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Organization assets: The same unique resources, which will lead to the creation or development of a sustainable competitive advantage.
Sometimes performance of these sources is direct effect on strategy and of these through is indirect effect on competitive advantage [17].
Knowledge-based capabilities: This capability involves stages acquisition of knowledge, creation, recording and the transmission ability of
the individual to the group and eventually converting into organizational knowledge. It is this point that this capability leads to
modernization and also continuous improvement of the performance other assets of organization [17].
Knowledge-based capabilities
Indirect
effects
Direct effects
Strategy
Indirect
effects
Competitive Advantage
Direct effects
Organization assets
The first approach is base the market will used to solve the problems with low complexity and high capability analysis
The second way is through the use of organizational hierarchy it will used to solve problems with complexity and capability
analysis in intermediate.
The third approach is through an agreed sequence is used for solving problems of high complexity and unreliable for analysis
The third approach followed by criticism from two perspectives above looking to fill the vacuum in previous research and is identify
weaknesses in them. Therefore focused on the entrepreneur's decision to acquire the optimal combination of tangible and intangible assets
[22].
3.2.1 High-Tech
Given that this concept has includes industries that in the process of development, evolution and technology dynamic.So one of the
problems facing the researchers in the field high tech industries is non providing clear definition of these industries. This issue especially
in developing countries that process of formation and development advanced technologies recently has started is more evident. Review
literature and report related with industries in developed countries shows that in the definition Hitech Industries, mainly used in three
different ways:
3.2.1.1 Based product (output)
In the countries like United States and Canada is used based on the standard Industrial classification (SIC) that industries that produce hightech products are introduced in the special codes. After reviewing the classification system based on classification system the North
American Industry and introduces was reviewed a new system for high-tech industries. Including definitions provided by the new system
for High - tech Industries, is based on product differentiation. In other words, this is a product-oriented approach.While one of the main
fields of application advanced technologies, is the existing products. Technology maturity level and access to industry information, as well
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Int ernational Journal of Economy, Mana ge ment and Soci al Sci ences , 2(10) October 2013
as of is one the basic indices assessment effectiveness. In general, researchers have have used of this method for identify the high-tech
industry that comparisons between industries provides but information obtained may be somewhat be misleading [22].
3.2.1.2 Active R & D (input)
Providing a clear definition of high-tech industries rather than emphasizing on the product or output , it is focused on the production
technology and its dynamics known samples of using this method can be define provided by the organization of economic cooperation and
development is for industries High tech. At this view, of technology-driven approach for the classification used of industries . Therefore
concept is used for research and development for the purpose . In other words, this type of classification is used continuum the technology
for producer - technology for customer.Of three indicators ratio costs to added value industry, ratio costs to production (GDP) and costs
R & D and technology cost used in center goods and capital goods for production. Under the second method, main features high intensity,
high-tech industries, research and development activities (Technology Development) is compared with other industries. The main
advantage of this classification is that the classification of which form is the based technology and during a defined period of time, High
tech Industries list will have to change.
3.2.1.3 Input - Output
Define for High tech Industries is based on the two approach inputs and outputs that is presented a framework under Tech paradigm that
based on of several characteristics high-tech industries such as production inputs, the dynamics of business competitors an invisible,
creating demand, and a combination of technologies is defined not only a specific attribute. compare The third method with previous
methods, first and second methods mainly, focused on indicators objectively, however, the third method are considered on the subjective
indicators.
3.2.2 Characteristics of high-tech industries.
Market volume is based for advanced technology has products grown rapidly during the last two decades . Therefore, it is necessary,
characteristics distinct in technology-based industries outlined in Table 2
Table 2. Characteristics of technology-based industries
4.
View
Market
Description
In the market for advanced technology products, technology life cycle is more important than product life
cycle, size large organizations will not necessarily lead to competitive advantage. However, large organizations
have more resources for research and development, even the in some cases, leading is to organizational inertia.
In the early stages of forming of a new market based high tech, dimension supply is more essential than
dimension demand. Numerous opportunities arising from rapid technological developments and prioritize
opportunities is a fundamental task and entry of new competitors into the market and industry shocks, reason
the move of the market is of supply to demand . Feeling insecurity buyer in early stage, has a major impact on
market demand in high-tech products. Social and political expectations and the likely effects high tech,
Therefore, possibility of government intervention in the market conditions is more than other industries.
General mentality of than a high-tech capabilities and potential is beyond the it actual capacity Therefore,
alleged the by developments is accompanied with a kind of ambitions.
Source
[23], [24], [8]
Main
element
Diversity of technology as a competitive tool in this type of industry , concentrating activities R & D , demand
for technology-based products , invest at all stages of activity, the outdated the product due to high speed cycles
of innovation, competition unknown, ratio costs capital to expenditures R & D usually has more than one and
combining existing technologies to methods new.
[25]
Factor
Axis technologies, means technologies that organization business, that is based on the centered technologies of
the kind the high tech That scientists and engineers comprise the major part of the manpower.
After reviews aspects Theory of competitive advantage In terms of being accordance with advanced technology-based industries and adapt
to features this industry is formed Table 3.
Table 3. Competitive Advantage - Advanced Technology
Competitive
Advantage
Industrial organization
theory
Resource-based theory
dynamic capabilities
theory
Knowledge-based theory
Entrepreneurial Theory
factor
Features
main
element
Based product
(output)
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Explain the Theory of Competitive Advantage and Comparison with Industries based on Advanced Technology
847
Internat ional Jour nal of Economy, Mana ge ment and Social Sciences , 2(10) October 2013
5.
The present era, where technology has a major role in the business's competitive position, the necessity of formulate and execute long-term
plans that are consistent with dynamic technology are not covered on directors. However, due to the long history studies in the field of
competitive advantage, Dare to say that ever increasing demands of contemporary developments, especially in technology-based industries,
dimensional of the theory of competitive advantage faced with these challenges, its is lost effectiveness. In Table 3 is defined the most
important competitive edge theories related to technology-based on dustries.
Features
The theory
industrial
organization
Resource-based
theory
Based on of
dynamic
capabilities the
theory
Entrepreneurial
Theory
Knowledge-based
theory
Method
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Int ernational Journal of Economy, Mana ge ment and Soci al Sci ences , 2(10) October 2013
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