NAVIGATING AN ERA OF CONVERGENCE: COMPETITIVE CONSEQUENCES OF ALLIANCE EXPERIENCE AND ATTENTION FOCUS

Industry Convergence is impacting multi-billion dollar markets including at least 50% of top 500 firms’ industries in the U.S. Yet, this phenomenon is underdeveloped in both theorizing and operationalization. A limited research on convergence almost exclusively focuses on macro-level structure changes, while we know little about strategic implications of firm-level entrepreneurial actions in this context. Until two or more industries converge, they can be easily differentiated; where they converge, there is neither one nor another but only a new industry. This presents a unique context for advancing the understanding of our theories as well as managerial practices. I structure my dissertation into two essays to explore two sets of firm-level actions. My first essay examines the sequential relationship between alliance experience and interindustry initial acquisitions. Building on organizational learning and resource dependence theory, this study reveals the condition that firms do not rely on alliance to make subsequent acquisition. In my second essay, I propose that firms need to develop a deep depth of field (i.e. competing with a great number of heterogeneous competitors) in order to sustain performance during an era of convergence. A deep depth of field is analogous to a picture in which the foreground and background are both in focus. Using product market competition among firms in the telecommunications equipment and computer networking industries during the 1991-2003 period, I validate this argument. With the depth of field construct, this study bridges the attention-based view and industry evolution research. I also create two empirical indicators for measuring the extent and the locus of industry convergence