Keywords: strategic typology, firm capabilities, cross-national, Japan, China
The authors examine the relationship between strategic type and development of distinctive marketing, market-linking, technology, and information technology (IT) capabilities to implement innovation strategy. They hypothesize that prospectors must build technical and IT capabilities, whereas defenders develop market-linking and marketing capabilities. The authors collect data from 709 firms across the United States, Japan, and China. They find support for their capability hypotheses, as well as for some of their cross-national hypotheses that are based on cultural and business environment differences among the three countries. In particular, they find support for the hypotheses that Japanese firms have greater technology and IT capabilities than U.S. firms of the same strategic type. They conclude with implications for management. The strategic typology of Miles and Snow (1978) has received much attention in the marketing and management literature over the past two decades (e.g., Conant, Mokwa, and Varadarajan 1990; Dyer and Song 1997, 1998; Griffin and Hauser 1996; Gupta, Raj, and Wilemon 1986; McDaniel and Kolari 1987; McKee, Varadarajan, and Pride 1989; Parry and Song 1993, 1994; Ruekert and Walker 1987; Song and Xie 2000; Walker et al. 2003). Almost 30 years after its initial appearance in the literature, their typology is viewed widely as having stood the test of time and is still the most popular and commonly accepted model of strategic types in the management literature, having been applied in many different industry settings (DeSarbo et al. 2005; DeSarbo et al. 2006; Hambrick 2003). Miles and Snow envision strategy as the patterns in the decisions by which a strategic business unit (SBU) aligns itself with its environment, and they categorize SBUs according to these patterns. The critical underlying variable in their typology is the rate of change in an SBU’s products or markets. Using an exploratory empirical study, Miles and Snow propose four strategic types—prospectors, analyzers, defenders, and reactors—and suggest that each of the first three types chooses a different competitive strategy with respect to products and/or markets: Prospectors will innovate technologically and seek out new markets, analyzers will prefer a “second-but-better” strategy, and defenders will focus on maintaining a secure niche in a relatively stable
Michael Song, Robert W. Nason, and C. Anthony Di Benedetto
Journal of International Marketing © 2008, American Marketing Association Vol. 16, No. 1, 2008, pp. 4–38 ISSN 1069-031X (print) 1547-7215 (electronic)
product or service area. Miles and Snow suggest that all three of these strategic types can be successful if the SBU matches its strategy to the competitive environment and develops and deploys appropriate capabilities. Capabilities have been broadly defined as “complex bundles of skills and accumulated knowledge that enable firms [or SBUs] to coordinate activities and make use of their assets” (Day 1990, p. 38). In this article, we examine the relationship between Miles and Snow’s (1978) strategic type and four capability constructs: technology, market linking, marketing, and information technology (IT). Day (1994) suggests that both technology and market-linking capabilities (or “insideout” and “outside-in” capabilities, respectively) are critical to sustained competitive advantage and superior performance (see also Day 1990; Day and Wensley 1988). Technology capabilities, which enable the organization to improve production process efficiencies and ultimately reduce its costs and increase its competitiveness, include financial management, cost control, technology development, logistics, manufacturing, and other processes with an internal emphasis. Market-linking...