Analysis of the effect of competitive tactics on performance: pioneers versus followers

Abstract

Competitive tactics play a key role in explaining the different levels of organizational performance because these are the linkers between strategy formulation and implementation. This study investigates two primary competitive tactics, the quality-oriented competitive tactic (Quality) and the cost-oriented competitive tactic (Cost); these are closely related to Porter¿s generic competitive strategies. In addition, we analyze two other important competitive tactics, the innovation-oriented competitive tactic (Innovation) and the marketing-oriented competitive tactic (Marketing), which mediate the relation between the main tactics and performance. However, there is no global model that includes not only the main competitive tactics but also the relations between them. Hence, we attempt to adopt an integrative posture by viewing the competitive tactics as inextricably linked and as forming the fundamental pillars on which a sustainable competitive advantage could be established.Using the computer-assisted telephone interviewing (CATI) procedure, 200 valid responses were obtained from CEOs in the German pharmaceutical industry. For every firm in the sample, we collected data associated with the 3-year period immediately before and after the enactment of the Act on the Reform of the Market for Medicinal Products (AMNOG) in 2011. The data analysis was performed using the partial least squares structural equation modeling (PLS-SEM) technique and the SmartPLS 3® Professional software. A multi-group analysis is conducted to examine whether there are significant differences between pioneers and followers. The so called ¿Relation Map Competitive Tactics-Performance: Pioneer vs. Follower relation map is confirmed.