Karel Cool

Power and firm profitability in supply chains: french manufacturing industry in 1993

The paper examines the relationships between the power of suppliers and buyers and the profitability of sellers who are situated in supply chains between both sets of firms. A review of the literature on power in exchange relations shows there are several power concepts which may have a different impact on seller profitability and whose impact possibly can offset each other. This may be the source of the conflicting evidence on this topic. A failure to distinguish among the concepts may also lead to an underestimation of industry effects relative to resource effects as drivers of firm profitability. The paper uses a new data base of the Banque de France on French manufacturing industry. The anlayses examine whether different power concepts may be empirically identified and what their relationships are with seller profitability. The findings point to the existence of multiple power concepts and indicate that, in the sample, industry effects are more important than firm effects (as measured by relative market share) in explaining seller profitability. The findings also suggest that buyer power explains a much larger percentage of the variance in seller profitability than supplier power.

Simultaneous Multidimensional Unfolding and Cluster Analysis: An Investigation of Strategic Groups

This paper develops a maximum likelihood based methodology for simultaneously performing multidimensional unfolding and cluster analysis on two-way dominance or profile data. This new procedure utilizes mixtures of multivariate conditional normal distributions to estimate a joint space of stimulus coordinates and K ideal points, one for each cluster or group, in a T-dimensional space. The conditional mixture, maximum likelihood methodology is introduced together with an E-M algorithm utilized for parameter estimation. A marketing strategy application is provided with an analysis of PIMS data for a set of firms drawn from the same competitive industry to determine strategic groups, while simultaneously depicting strategy-performance relationships.

Resolving the Commitment Versus Flexibility Trade-Off: The Role of Resource Accumulation Lags

We examine how time-consuming resource accumulation influences the classic strategy trade-off between commitment and flexibility. In particular, using 1975-95 data from the worldwide petrochemical ...

The relative impact of actual and potential rivalry on firm profitability in the pharmaceutical industry

This paper estimates the effects of actual and potential rivalry on profitability of firms in the U.S. pharmaceutical industry during the 20-year period 1963–82. The results show that during the 1960s actual rivalry among the sampled firms did not materially affect firm profitability, but that during the 1970s competition among incumbents had an increasingly adverse effect on their profitability. The results also show that potential competition significantly reduced drug firms’ profitability during the entire 20-year period. Copyright

European industrial restructuring in the 1990s

List of Tables - Preface - Notes on the Contributors - Dynamics of European Industrial Restructuring K.Cool - PART 1: EUROPEAN INDUSTRIAL RESTRUCTURING: HOW FAR ALONG? - European Economic Restructuring: Retrospect and Prospect R.Ballance - A Comparative Analysis of Industrial Restructuring in Europe, the US and Japan T.Pugel - Economic Restructuring in Europe and the Market for Corporate Control R.C.Smith & I.Walter - Restructuring Industry in East Germany H.Siebert & H.Schmiedling - PART 2: RESTRUCTURING MECHANISMS - Entry, Exit and Structural Adjustment in European Industry P.Geroski - Public Policy towards Industrial Restructuring D.J.Neven & J.Vickers - Corporate Restructuring: Evidence from the Stock Markets T.Vermaelen - PART 3: MANAGING THE RESTRUCTURING PROCESS - Managing Change and Corporate Performance A.Pettigrew & R.Whipp - Industry Restructuring, Acquisitions and the Value Creation Process P.Haspeslagh & D.Jemison - The Role of Partnerships and Alliances in the European Industrial Restructuring Y.Doz - PART 4: INDUSTRIAL RESTRUCTURING AND TECHNOLOGICAL CHANGE - Appropriating the Returns from Investments in R&D Capital E.Mansfield - Industry Restructuring through Alliances: Open Systems in the European Mainframe Computer Industry K.Cool & H.Landis Gabel - Index

Second Thoughts on the Transferability of the Japanese Management Style

Adopting a strategic management perspective, an attempt is made to distinguish system-free from system-specific structural and interactional aspects in the Japanese and Western management styles and systems. To determine what system-specific elements can be transferred from the Japanese management system to the Western management system (in particular the U.S.), an ecological-cultural-institutional analysis is conducted. The intent of this analysis is to present a genuine open-systems view on the subject of comparative management and on the issue of transferring elements from one management system to another.

Experience and Learning in Wine Supply Chain Negotiations

This paper examines the link between experience in negotiations and the necessary governance mechanisms to prevent supply chain opportunism. The analysis comes from data generated from an experiment based on the French champagne industry. Results show that dyads where both parties have prior negotiation experience better align with a cooperative supply chain governance context, creating higher individual and joint outcomes. Although dyads with asymmetric negotiation experience achieved more win-win outcomes than inexperienced dyads, their results still tended to be driven by the less experienced party.

Factor and Regression Analysis, Power and Profits in Supply Chains

The paper explains the iterative process i.e. the difficulties, problems and practical solutions, that researchers typically experience in arriving at a final version. The context of the paper concerns the importance of market power versus firm resources for firm profitability. Recent papers using descriptive variance components analysis on Federal Trade Commission Line of Business data have focused on the relative importance of industry effects versus firm effects regardless of their underlying causes. This study examines specific factors underlying industry effects, namely multiple buyer and supplier power concepts and uses a different methodology, factor and regression analyses, on an alternative sample from the Banque de France’s Sesame database. The results indicate that, in the sample, industry effects are more important than firm effects (as measured by relative market share) in explaining seller profitability and suggest that buyer power explains a much larger percentage of the variance in seller profitability than supplier power.

Diseconomies of Time Compression

This paper discusses the concept of time compression diseconomies and its importance to the sustainability of competitive advantage. It focuses on a key driver of time compression costs, the time-dependency of resource accumulation, and illustrates the effects of three characteristics of this accumulation process (productivity, cycle time and absorption constraints). The effects are illustrated using a stylized stocks-flows simulation with the iThink software.

The Dynamics of Resource Erosion

The paper discusses patterns of resource erosion (alternatively called resource decay, leakage, depreciation). Taking a stocks-flows perspective, erosion is conceptualized as the loss of value per period (e.g. a year) of an asset stock (e.g. R&D capital, brand loyalty) as a consequence of a variety of mechanisms (e.g. R&D spill-overs, customers leaving, expiration of a patent). The paper discusses two patterns of erosion, linear and exponential, and explores their strategic implications. The paper also discusses some unexpected outcomes that may result from the combined effect of common growth and decay patterns, as well as additional difficulties that stem from inference lags.