Optimal Distinctiveness in High-Tech Industries : Investigating the Impact of Strategic Position Categorization Deviation on Performance

This research develops a multilevel framework that investigates the optimal distinctiveness of strategic categorization within and between categories, and examines how these factors independently and interactively influence market performance. Our longitudinal study, involving 2,409 firms from eight high-tech industry categories between 2009 and 2019, strongly supports our hypothesis. We claim that the negative relationship between the deviation from within-category strategic categorization and market performance at the category's growth stage, turns into an inverted U-shaped curve when the category reaches maturity. Additionally, our investigation uncovers the boundary condition of a deviation in strategic categorization within a category and firm growth. We highlight that the negative impact during the growth stage of the category weakens when the distinctiveness of strategic positioning between categories and firm growth is high. Moreover, the inverted-U shape during the category's mature stage remains relatively stable with high inter-category strategic positioning distinctiveness, but flattens when firm growth is high. This article offers a multilevel perspective, urging managers to take into account both the reference level and the category stage when positioning their firms. We propose that high-tech firms reap the benefits of strategic differentiation only after surpassing a certain legitimacy threshold, and the gained legitimacy beyond this threshold propels the advantages of a moderately distinctive strategic positioning