Strategic Competitive Positioning: A Structural Hole-based Firm-level Opportunity Construct for Information Systems Research

Lee, Myunghwan, Gene Moo Lee, Hasan Cavusoglu, Marc-David L. Seidel. “Strategic Competitive Positioning: A Structural Hole-based Firm-level Opportunity Construct for Information Systems Research”, [Latest version: Nov 27, 2024]

  • Previous title: Strategic Competitive Positioning: Unsupervised Operationalization of a Structural Hole-based Firm-specific Construct
  • doc2vec model of 10-K reports: Link
  • Presented at UBC MIS Seminar 2018, CIST 2019 (Seattle, WA), KrAIS 2019 (Munich, Germany), DS 2021 (online), KrAIS 2021 (Austin, TX), UT Dallas 2022, KAIST 2022, Korea Univ 2022, INFORMS 2022 (Indianapolis, IN)
  • Funded by Sauder Exploratory Grant 2019
  • Research assistants: Raymond Situ, Sahil Jain

We build on Burt’s structural hole concept to theorize a firm-specific strategic competitive positioning (SCP) construct for information systems (IS) research. Using unsupervised document embeddings, we operationalize the SCP construct to capture a firm’s relative competitive and strategic positioning in a similarity matrix of U.S. public firms based on their annual reports. Our construct dynamically captures competitive positioning across firms and years, relying on neither artificially bounded industry classification systems nor significant expert intervention to construct the measure, ensuring a more efficient and adaptable approach. We demonstrate the effectiveness of this construct through a series of empirical analyses investigating the effects of SCP on firm value and survival. The results show that our measure outperforms existing measures in successfully predicting post-IPO performance. This paper makes significant contributions to the IS literature by proposing an organizational theory-based unsupervised approach to dynamically conceptualize and measure firm-level strategic competitive positioning from unstructured corporate disclosure documents.