Hypercompetition in the ERP Industry: It takes all the running to stay in place

Applying the Red Queen Theory (RQT), the study posits that an enterprise resource planning (ERP) software vendor counters the Red Queen Effect (RQE) in the hypercompetitive ERP industry by strategically aligning itself with multiple partners to form an ecosystem that can be leveraged for growth, provide multiple opportunities for innovation, and produce and deliver a product to its customers. By carrying out a cross-case analysis of ERPCorp, its partners and rivals based on multiple qualitative interviews, the paper shows that ERPCorp was able to survive the entry process as well as adapt and avoid the competency trap by using a partner network to sell, implement and develop complementary offerings. The key finding is that in order to survive the “race”, ERPCorp has to adopt new strategies to match or exceed the actions of its rivals which creates various tensions with partners, thus requiring the ability to manage an inter-organizational network effectively.