Industry variety, life-cycle stages, and performance: A dynamic perspective

U.S. firms are often too concerned with their immediate competition and ignore the benefits that can accrue due to competition. Using the concept of industry variety (variation in strategies being pursued by firms), this article attempts to answer a central question: Does variety in an industry lead to better performance and, if so, does it persist over time? This article also examines how the relationship between industry variety and performance changes over an industry's life cycle. Using data from 15 U.S. manufacturing industries, the study finds that industry variety can benefit the entire industry; to derive the benefits, firms need to increase competitive intelligence. Implications for CI managers are discussed based on these findings. © 1997 John Wiley & Sons, Inc.