Chandler

Institutional theory

Theory explaining how industries develop shared norms rules and routines that firms follow to gain legitimacy

Legitimacy

Social acceptance that allows firms to access resources survive and grow

Declining industries

Industries where real revenue growth is negative and established norms become outdated

Industry isomorphism

Process by which firms within an industry become increasingly similar over time

Entrepreneurial identity

A firm’s self-definition based on who it serves what it does and why it is different

Business model

The system through which a firm creates delivers and captures value

Value proposition

The core reason why customers should buy a firm’s product or service instead of competitors

Customer value proposition focus

Emphasis on customer benefits rather than product features or cost

Distinctive value proposition

A value proposition that offers benefits not addressed by industry representative firms

Proposition 1 customers

High-growth firms in declining industries focus on customer benefits ignored by incumbents

Institutional rigidity

Tendency of incumbent firms in declining industries to stick to established practices

Market gaps

Unmet or underserved customer needs that emerge as industries decline

Focused differentiation

Strategy where firms target specific customer segments with unique value rather than low cost

Legitimate distinctiveness

Being different in ways that customers value which grants legitimacy in uncertain markets

Symbolic management

Use of symbols such as website design language and visuals to signal legitimacy

Website as value signal

Firm websites function as symbolic storefronts communicating identity and value

Proposition 2 quality

High-growth firms have higher quality websites than industry representative firms

Proposition 3 date

High-growth firms keep their websites more up to date than industry representative firms

Website usability

Ease with which users can navigate purchase products or contact the firm

Proposition 4 usability

High-growth firms have more usable websites than industry representative firms

Ease of purchase

How easily customers can buy or access the firm’s product through the website

Ease of contact

How easily customers can find and use contact information on the website

Social media usage

Display of links to platforms such as Twitter Facebook or LinkedIn

Proposition 5

High-growth firms use social media signals more frequently than industry representative firms

Qualitative analysis

In-depth comparison of value propositions across selected industries

Quantitative analysis

Statistical comparison of website features across matched firm samples

Matched-pair design

Research design comparing high-growth firms with similar firms matched by size or age

High-growth firms

Firms achieving rapid sales growth despite operating in declining industries

Industry representative firms

Firms whose growth mirrors or underperforms the declining industry average

Total customer solution

Offering integrated services and outcomes rather than standalone products

Non-cost competition

Strategy focusing on value experience or identity instead of price competition

Website legitimacy signal

Website features that indicate professionalism credibility and modernity

Key empirical finding

High-growth firms differ both in what value they offer and how they communicate it

Main theoretical contribution

Linking institutional theory with business model value propositions

Main practical implication

Firms in declining industries should innovate value propositions and improve communication

Exam takeaway rule

In declining industries growth comes from distinct value plus strong signaling not cost leadership