The Growth of Firms and the Evolution of Industries

Fast growth by a firm often can lead to conflict with its competitors over market shares. This conflict impacts on the growth rate of the firm as well as on industry structure. The nature of these impacts depends on the competitive strategies adopted by the firm and its competitors. Alternative patterns of strategies are identified and analyzed, including patterns associated with Schumpeter’s theory of creative destruction and Steindl’s theory of industry concentration. In each case, industry structure co-evolves with the growth of the firm and the choice of competitive strategy. I. Background II. Dynamics of Competition III. The Way Forward IV. Tentative Propositions V. Stages of Competitive Behavior and Industry Development VI. Applications VII. Conclusions