On the structural dimension of competitive strategy

This paper establishes the existence of systematic differencesin the nature of competitive strategies typically pursued acrossindustries. By means of qualitative content analysis, we extracteda matrix of 76 industries times 12 strategies reported as beingcharacteristic in a series of monographs. Subsequent tests forthe statistical significance of observed differences in thetypical strategy portfolio show an evident link to an industry'sgeneral reliance on intangible investments, human resourcesand inputs from external services.     

Numerical Modeling of Dependent Credit Rating Transitions with Asynchronously Moving Industries

Two models of dependent credit rating migrations governed by industry-specific Markovian matrices, are considered. Caused by macroeconomic factors, positive and negative unobserved tendencies, encoded as values “1” or “0” of the corresponding variables, modify the transition probabilities and render the evolutions dependent. They are neither synchronized across industry sectors, nor over credit classes: an upswing in some of them can coexist with a decline of the rest. The models are tested on Standard and Poor’s data. MATLAB optimization software and maximum likelihood estimators are used. Obtained distributions of the hidden variables demonstrate that the considered industries migrate asynchronously trough credit classes. Since downgrading probabilities are less affected by the unobserved tendencies, estimated by Monte-Carlo simulations distributions of defaults, exhibit lighter, than for the known coupling models, tails for schemes with asynchronously moving industries. Moreover, the lightest tails were obtained in the case of industry-specific transition matrices.