Competitive Analysis and New Venture Performance: Understanding the Impact of Strategic Uncertainty and Venture Origin *‪.‬

Understanding the competition is important for success in today's marketplace (Chen, 1996; Youngblood, 1998). This is especially true among new ventures (companies that have been in existence for eight years or less) (McDougall et al., 1994; Zahra & Bogner, 2000). To survive and achieve success, new ventures need to understand the dynamics of competition in their industries (Vella & McGonagle, 1988) and develop the skills and capabilities that give them a competitive advantage. Some new ventures, however, may fail to recognize the importance of competitive analysis (CA) (MohanNeill, 1995), or lack the time and resources to conduct this activity. A growing body of research within the resource-based view (Penrose, 1959; Barney, 1991; Priem & Butler, 2001) and the dynamic capability perspective (Teece, 1991) suggests that firm-specific variables influence a firm's competitive advantage and its performance (Peteraf, 1993; Rumelt, 1991). Firm-specific variables include any assets, resources, capabilities, and idiosyncratic systems and processes (Barney, 1991). While historical factors might contribute to the accumulation of these resources, they are often the result of strategic decisions (Fahey, 1999). An understanding of the firm's competitive landscape and the intensity of the competition often directs the development and subsequent use of these resources and capabilities (Grant, 1998). Effective CA, therefore, can be especially useful in guiding managers' thinking about the types of assets and resources to develop, the capabilities to be deployed, and the strategic objectives to be emphasized (Fahey, 1999; Oster, 1994).