| This dissertation draws on the resource-based view and industrial organization literatures to determine optimal patterns of strategic investment under uncertainty and competition. From both a game-theoretical and an empirical perspective, it is examined how firms' strategic decisions regarding (i) time compression, (ii) flexibility, and (iii) commitment depend on the specific nature of sustainability, uncertainty, and competition. It is argued that the mechanisms sustaining competitive advantage (such as time compression diseconomies) might actually hinder its creation. Furthermore, time-consuming resource accumulation shifts the classic trade-off between commitment and flexibility in competitive strategy and gives rise to an incremental investment bandwagon behavior by industry players.; In industries with time-to-build, firms might either invest in flexible manufacturing or compress time ex post to timely react to new information and quickly reach the winning product-market positions before profits are competed away. Time compression and flexibility are substitute strategies whenever time-to-build is substantial and demand uncertainty is moderate. However, time compression dominates flexibility if demand uncertainty is sufficiently high.; Empirical evidence from the worldwide petrochemical industry (1975--1995) suggests that, as hypothesized, the longer it takes to accumulate resources in an industry, the more likely firms are to invest under uncertainty and the less effective pre-emptive strategies become. Uncertainty, although hindering investment through option value, amplifies this effect. |
