Strategic Positioning and Risk-Return Behavior

The search for a strategic positioning that allows the creation of sustainable competitive advantages and the consequent generation of extraordinary returns can be studied through several methodologies. From the rich set of tools that can be used to analyze strategic positioning, Levinthal (1997) presents a methodology based on evolutionary biology and adapted from Kauffman's NK model. This paper brings a variation of the NK model applied to the study of the strategic positioning of organizations. Based on the work of Levinthal (1997), the article analyzes the dynamics of the search for better adaptation points or strategic positions in a rugged landscape. The original model of Levinthal implies a convergence of companies in a smaller number of strategic positions, since, rationally, companies should be looking for positioning with higher adaptation to the competitive environment. However, the incorporation of concepts of behavior towards risk may lead to a different strategic alternatives used by organizations. For example, our study suggests that a model based on the traditional financial theory, in which the marginal utility decreases with increments in risk, may implicate equilibrium in a larger number of sub-optimal positions. In addition, a model based on the prospect theory, with risk-aversion behavior in the domain of gains and risk-prone attitude in the domain of losses, may explain real world dispersion in strategic positioning