A working theory of the Superfirm

Thesis Series #6

I found 11 firms (out of 8,430 analysed) that dominate their markets.

Here’s a working theory of how they did it:

One of the hardest parts of academic research is making sense of the empirical findings from the data analysis.

As you may have seen yesterday, I shared 11 ‘Superfirms’ with a technical dominance of the profit pools of their industry.

But how did they do it? It’s a perennial question of strategic management research.

The overarching proposition of my thesis is that firms that strategically align with external drivers of transformation can achieve market dominance.

The following four sequential propositions outline this argument:

1) Superfirm status requires a distinct competitive advantage that sets a company apart from its competitors.

This establishes that superfirm status necessitates a distinctive competitive advantage, reinforcing the importance of differentiation and the strategic utilisation of unique resources and capabilities to outperform competitors.

2) External drivers of transformation define and redefine competitive landscapes and alter the parameters of competitive advantage.

This transitions the focus from internal capabilities to the external environment, highlighting how industry drivers of transformation redefine competitive landscapes. The logical connection here is that while a distinctive competitive advantage is crucial, its relevance and sustainability depend on how well it resonates with and adapts to the changing external environment.

3) Companies that align their strategy with external drivers of transformation are better positioned to proactively adapt and innovate to sustain and enhance their competitive advantage.

Argues that strategic alignment with these external drivers of transformation enables proactive adaptation and innovation. This progression asserts that the external environment creates challenges and opportunities, and the ability to adapt and innovate in response to these forces is what enables an organisation to transform these challenges and opportunities into competitive advantages.

4) Sustaining and enhancing competitive advantage leads companies towards superfirm status.

Suggests that innovation and proactive adaptation pave the way for superfirm status. Strategic alignment and the resulting innovation are critical for survival, maintaining competitiveness, and propelling an organisation to a superfirm status.

Put together, however, this set-up the next stage of my PhD project perfectly. I can’t just state the above as being true. I had to find a way of proving them.

Tomorrow, I will put everything shared this week into one post that concludes the series about my first (of three) research papers that constituted my thesis.

Be sure share this post and follow me, Dr. Ian Hallett, so it shows up in your feed.

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This post is part of a series of notes I am writing about my PhD thesis, to share how I approached it and what I learned. You can see the entire series on my website.