Navigating strategic shifts: Imitative and preventative responses to rivals’ disruptive change in strategy

Abstract

Competitive dynamics research has provided a better understanding of the strategic interplay between competitors. However, scholars have given limited attention to examining how firms respond to competitors who introduce a disruptive change in strategy, forcing each competitor in the industry to decide how or if they will respond. In this study, we focus on four possible responses: (1) an imitative response, when a firm decides to replicate its competitors’ strategy by developing the requisite capabilities; (2) a preventative response, when a firm develops capabilities aimed at mitigating the impact of the disruptive strategy; (3) a combined response, when it pursues both imitative and preventative responses; and (4) neither response. We theorize that when responding to a disruptive change in strategy, the deployment of an imitative (preventative) response will be positively (negatively) associated with firm performance, while a combined response will be the least effective. In addition, we examine recent firm performance and relevant competitive experience as important contextual moderators. Using a sample of competitive interactions between teams in the National Football League responding to the disruptive strategy known as the West Coast offense, we test these hypotheses. Our findings offer practical guidance to firms by identifying how different responses shape performance outcomes and by clarifying the contextual conditions under which responses are most successful.