RIVALRY AND THE INDUSTRY MODEL OF SCOTTISH KNITWEAR PRODUCERS

In this paper we argue that market boundaries are socially constructed around a collective cognitive model that summarizes typical organizat ional forms within an industry. This model is produced when firms obse rve each other's actions and define unique product positions in relati on to each other. Our study examines the question of how firms define a reference group of rivals when market cues are ambiguous and interor ganizational variety is high and identifies the industry model underly ing rivalry among Scottish knitwear producers. The data suggest that a six-category model of organizational forms best describes the common sense of competition in the industry and that an ensemble of attribute s involving size, technology, product style, and geographic location f orms the foundation for this ordering. The results also show how this industry model is reproduced within the rivalry network structuring im perfect competition in the industry.