Research Summary
We investigate why firms imitating the same competitor’s strategy in the same environment often replicate different components of that strategy. We argue that such divergence can arise because firms vary in the internal interdependencies that underlie their strategies. When a firm significantly differs from a competitor in how one component of its strategy interacts with other components, the consequences of replicating the competitor’s choices about that component are harder to anticipate, making imitation less likely. We discuss how imitators’ internal coordination mechanisms may help mitigate barriers to imitation arising from interdependence asymmetries and test our resulting hypotheses in the context of esports, where small teams of professional video-game players compete in high-stakes tournaments.
Managerial Summary
We investigate why firms observing the same competitor often imitate different aspects of that competitor’s strategy. We argue that this variation stems from each firm’s unique internal connections between activities. When a competitor’s practice is closely linked to other parts of their strategy, imitation becomes riskier if similar links do not exist in the focal firm—making imitation less likely. Using data from esports teams, where both strategic choices and coordination are observable, we show that these differences can act as barriers to imitation. However, strong communication or shared experience among decision-makers helps overcome such barriers. Our results may caution managers against indiscriminately copying “best practices”: the highly competitive teams we studied considered not only what competitors did, but also whether those practices fit their own processes and structures.