Raising Rivals' Costs Through Political Strategy: An Extension of Resource-Based Theory

17 Pages Posted: 8 May 2003

See all articles by Abagail McWilliams

Abagail McWilliams

University of Illinois at Chicago

David D. Van Fleet

Arizona State University

Kenneth D. Cory

Calpine Corporation

Abstract

In this paper, we extend the resource-based theory of the firm to show that it can be used to analyse the effectiveness of competitive strategies. Specifically, we demonstrate that political strategies aimed at raising rivals' costs by blocking the use of substitute resources may create the opportunity for a firm to capitalize on resources that are valuable, rare, and costly to imitate. The uses of political activity to block the availability of substitute resources are discussed in detail and examples are provided to demonstrate how such strategies are used and to illustrate how successful they may be. This is an important extension of the resource-based theory because it demonstrates how the theory can be applied by researchers and practitioners.

Suggested Citation

McWilliams, Abagail and Van Fleet, David D. and Cory, Kenneth D., Raising Rivals' Costs Through Political Strategy: An Extension of Resource-Based Theory. Journal of Management Studies, Vol. 39, pp. 707-724, 2002. Available at SSRN: https://ssrn.com/abstract=316076

Abagail McWilliams (Contact Author)

University of Illinois at Chicago ( email )

601 South Morgan Street
(MC 243)
Chicago, IL 60607-7123
United States
312-996-2680 (Phone)
312-996-3559 (Fax)

David D. Van Fleet

Arizona State University ( email )

7171 E. Sonoran Arroyo Mall
Mesa, AZ 85212
United States

Kenneth D. Cory

Calpine Corporation ( email )

San Jose, CA
United States

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