Abstract for: Dynamic model in understanding dynamics of competitiveness: system dynamics approach in mobile handset vendor business
Understanding firmís competitiveness is the central goal in strategic management. The resource based view has emerged as the main theory explaining performance differences between firms. However, a significant amount of criticism has been raised against the theory, and the validity of the theoretical framework has been questioned. These questions have become stronger as there is a lack of credible empirical validation due to the problematic concepts and measures used in the theory. Dynamic RBV theory has emerged to overcome challenges in the traditional RBV theory but the new theory has proven to be challenging to implement as it sets new challenges for the used research methodology. In this study, system dynamic simulation was used to overcome these challenges in an empirical case study on the competitiveness in the mobile handset vendor business. The results from simulation give support for both the created dynamic RBV framework, but also to the suitability of system dynamic simulation as a tool in strategic management research.