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Miles and Snow (1978, 2003) detail three viable business strategies that may exist simultaneouslywithin industries—Prospectors, Defenders, and Analyzers—where the key dimension of the strategy typology is the organization’s rate of change regarding its products and markets (Hambrick 1983).1 These strategies are positioned along a continuum, with prospectors at one end and defenders at the other. Prospectors rapidly change their productmarket mix to be innovative market leaders in numerous domains, while defenders maintain a narrow and stable product focus to compete on the basis of price, service, or quality (Miles and Snow 1978, 2003). Firms that constitute the middle of the continuum are analyzers,which have attributes of both prospectors and defenders (Miles and Snow 1978, 2003). Consistent with prior research in both management and accounting (e.g., Hambrick 1981, 1983; Simons 1987; Ittner, Larcker, and Rajan 1997), we focus on the two distinct strategies at the ends of the continuum, prospectors and defenders. Appendix 1 provides a more detailed description of both the prospector and defender strategies.
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