1. Introduction
The niche of an organization is reflected in its degree of specialization. Specialist and generalist organizations pursue different competitive strategies, have different organizational structures and capabilities, and possess different types of resources [
1]. Enterprise niche research has been one of the hot topics in the field of organizational ecology and strategic management in recent years [
1,
2,
3,
4]. A niche can not only show the actual results of relationships between enterprise groups, it also is the power and reason for the occurrence and development of community characteristics, competition, and evolution among enterprises. Niche characteristic measures include niche width and niche overlap, which are based on the distribution data of enterprises in a series of resource states. However, niche theory has not fully explained how enterprises with different niche characteristics can use the conditions of their environment to obtain the resources that they need for sustainable development, which is a research issue of great concern in the field of strategic management [
1]. In the theory of strategic management, it is fully emphasized that the sustainable development of an organization must be matched with the internal management system and the external competitive environment [
5]. Therefore, when an enterprise formulates a strategy, it must also consider the external organizational factors of relevant stakeholder groups (include customer preferences, supplier strategies, competitor trends, etc.) beyond the organizational boundaries [
6,
7].
The application in strategic management is mainly focused on the relationship between enterprise niche and sustainable development [
8]. As a new theory, the main problem of enterprise niche theory is the lack of a consistent analytical framework. Therefore, in strategic management, the application of an enterprise niche often ignores interactions between different factors [
1]. In addition, the empirical study of enterprise niches needs more samples and complete data, which are difficult to achieve [
9]. Without these, the research lacks universality and reliability regarding its conclusions. Studying the application of enterprise niches in strategic management must be based on a new viewpoint and focus on an organization’s attributes.
According to the view of ecological theory, only a range of enterprises with a variety of means to obtain the resources that they need for sustainable development can survive after experiencing great changes in the environment. However, although some enterprises focus on specific markets, they can still survive an environmental crisis. For an example, H Company, which manufactures industrial cooling machines, is attached to the supply system of machine tool manufacturers and is responsible for the production of key components required by machine tools. Although the product category is single, it can be sold to various industries. This will enable it to adapt to changes in the industrial environment and adopt appropriate practices. This cooperative and symbiotic relationship between enterprises is the natural choice of organizing individuals to take advantage of group strength when facing environmental pressure [
10]. Although niche theory explains the survival opportunities of generalist and specialist organizations by adapting the organizational niche and the environment, enterprises do not exist independently in the ecosystem. They must interact with the natural environment, business environment, and other external environments in order to achieve the sustainable development of resources. Network theory provides an appropriate perspective on how an enterprise can effectively contact and interact with its members in the external environment [
11,
12,
13,
14,
15]. By introducing the network perspective into the discussion of the sustainable development of enterprises in the ecosystem, it is more possible to understand the overall strategic layout of enterprises in niche selection and network relationship building. On the other hand, both organizational ecology and strategic management studies have emphasized the importance of the niche concept in understanding different aspects of competition dynamics, but have not further explored the impact of the enterprise niche on enterprise performance [
16]. The factors that affect enterprise performance are the issues of most concern to enterprises and management scholars.
Therefore, this study puts forward a feasible research plan for the study of the niche strategy selection of enterprises after environmental changes and how it affects their performance, as well as the role and influence of enterprise network relationships. Based on niche theory, this study explores the niche strategy selection of Taiwanese firms investing in China, and enriches the existing research in the field of strategic management from the perspective of the organizational exterior of social network theory. This study re-examines, from the viewpoint of network theory, the niche characteristics and network relationships that will produce better performance for enterprises facing changes in the external environment. The traditional niche theory provides a good starting point for explaining the natural selection of enterprises caused by environmental changes. This study uses the investment area as the “ethnic group” division—using Taiwanese firms that invest in China or are in eastern and southern China—applies the niche theory in ecology to the discussion of the sustainable development of enterprises, and gives relevant operational suggestions to other enterprises.
2. Literature Review and Hypothesis Development
Niche theory has shown that the criteria for environmental selection tend to support generalist organizations better than specialist organizations, mainly depending on the variation patterns and duration of fluctuations in the environment. Generalist organizations with large variations in resource utilization have better performance due to their surplus capacity and resources in response to environmental changes, thus avoiding the threat of being eliminated from the environment [
17,
18]. For example, Dobrev et al. [
17] pointed out that the competition between GM and Ford was finally won by GM, which had better product market positioning. The niche width of this study includes product, process, and technology niche width. Enterprises with a large niche width of products have multiple channels of resources that are needed for sustainable development. If a certain product market is affected by the environment, these enterprises can still make up for the impact caused by environmental fluctuations through other product markets [
16,
19]. The niche width of the process indicates that the integration of business activities depends on whether the value activity is related to competitive advantage, scale, confidentiality, and other factors for the enterprise. Enterprises with a wide array of value activities can obtain market information at each stage of the activity, and are more alert to market changes than enterprises that specialize in a single value activity [
2,
16]. Many studies use the activities of enterprises involved in technological fields as a measure of enterprise niche, pointing out that the wider the scope of the technological fields invested in research and development, the greater the chances of sustainable development [
17,
20,
21,
22]. Therefore, the research hypotheses of this inference are as follows:
Hypothesis 1 (H1). Niche width has a positive effect on sustainable development.
Hypothesis 1a (H1a). Firms with larger niche width have better financial performance.
Hypothesis 1b (H1b). Firms with larger niche width have better nonfinancial performance.
The competitive relationships between organizations (or ethnic groups) cannot usually be studied through direct observation, so niche overlap can be used to explain and discuss competitive relationships by observing the utilization of resources, and can then be used to learn the dynamic growth model of organizations (or ethnic groups) under the condition of resource overlap. When the number of enterprises relying on similar resource spaces increases, the space for growth will be squeezed, leading to niche congestion, and thus intensifying competition [
23,
24]. In research on telephone companies, Barnett [
25] found that organizations did not share the same technology niche and were responsible for implementing different parts in the technology system, which could reduce the failure rate of telephone companies. Enterprises with a special niche can create value by providing products or operating processes that are different from those of their competitors. The higher the specificity of the products or processes, the less competitive pressure they face, and the more they can avoid the pressure of price cuts, thus obtaining better economic profits [
16]. Strategic management also claims that differences in enterprise performance are caused by differences in strategic positioning (customer needs, products, services provided by the enterprise). The essence of strategy is to choose activities that are different from those of competitors. Scholars have shown that a hybrid position between efficiency and differentiated strategic positioning can lead to good results [
26]. Therefore, if an enterprise can occupy a unique niche, it can avoid direct price competition with competitors and produce irreplaceable value, which is conducive to improving its performance. Therefore, the inference hypotheses of this study are as follows:
Hypothesis 2 (H2). Niche specificity has a positive effect on sustainable development.
Hypothesis 2a (H2a). Firms with higher niche specificity have better financial performance.
Hypothesis 2b (H2b). Firms with higher niche specificity have better nonfinancial performance.
Previous studies have pointed out that the influence of niche characteristics on enterprises must take into account contingency factors, such as market concentration [
27], institutional linkages [
28], interorganizational linkages [
29], and network embeddedness [
16]. In order to explore the relationship between niche characteristics and enterprise performance, this study regards the network relationship as a contingency factor that affects the relationship between niche characteristics and enterprise performance, indicating that the enterprise is not in a social vacuum, but rather needs to consider other manufacturers when making any decision, including what products to provide, how to implement the operation process, and the research activities in which to invest [
11,
30,
31]. From the perspective of network groups, this study explores the influence of the degree of embeddedness and centrality of network relationships on the relationship between niche characteristics and enterprise performance. The network of relationships among manufacturers provides a channel through which valuable information and resources can be shared, and organizations can reduce the uncertainty faced by channels that obtain needed inputs from outside or sell their outputs through the network connections among manufacturers. Such network relationships provide enterprises with survival opportunities and restrictions embedded in the network ecosystem, and affect their behavior and performance [
32,
33].
Network relationships are double-edged. In a highly embedded network relationship, enterprises and manufacturers are closely linked to each other. Such a network structure can provide enterprises with multiple but repeated sources of information, ensure the correctness of information, let network members know one another through circular interaction, generate familiarity and trust, and prevent speculative behavior [
34,
35,
36]. On the other hand, highly embedded network relationships will form a normative force, which will restrict the decision making and behavior of enterprises [
37]. Through providing products and services to customers in a variety of target markets or industries, engaging in a variety of upstream and downstream value activities, and investing in research and development activities in a variety of technical fields, widely operating enterprises scatter their resources in various niche spaces, striving for a central market position and facing more severe tests and competition [
27]. If they are embedded in a tight network relationship, they must often discuss the design of new products, the development of new technologies, and the improvement of product quality and cost with customer manufacturers. They are subject to the requirements of customers in the mainstream market for a long time, and develop the capabilities, organizational structure, and culture required by the value network. Therefore, they cannot make decisions effectively and respond to changes brought about by breakthrough innovations in the scientific and technological environment in a timely manner. On the contrary, enterprises that (i) provide products and services to customers in a single or a few target markets or industries, (ii) engage in a single value activity or a few upstream and downstream value activities, and (iii) devote themselves to research and development activities in a single field or a few technical fields obtain several operational advantages. They concentrate their resources in a single or a few niche spaces, survive in the market’s leading positions [
27], are attached to a certain supply system, and are responsible for producing key components.
In order to survive, specialist organizations in which the variation of resource utilization is smaller than that of generalist organizations have to contact the core manufacturers in the ecosystem and establish external relationships to seek support and assistance [
38,
39]. Through being embedded in close network relationships, professional organizations enhance their importance in the supply system by regularly discussing the design of new products, developing new technologies, and improving the interaction between product quality and cost with customer vendors to meet their requirements. Highly embedded network relationships can promote the accumulation of enterprise knowledge and the exchange of important information and business technologies [
40,
41]. Professional organizations maintain good relationships with customer manufacturers, can jointly solve problems and obtain direct feedback, and can improve products, technologies, and services through collective discussions, thus contributing to enterprise performance [
42]. Based on the above discussions, this study posits that a high degree of network embedding creates more norms than opportunities for widely operating generalist organizations, which must meet the requirements of core vendors in various niche spaces, while specialist organizations need core vendors to provide the necessary resources for sustainable development and must cooperate with the requirements of customer vendors in order to enhance their importance in the supply system. Therefore, the inference hypotheses of this study are as follows:
Hypothesis 3 (H3). The degree of network embeddedness has a moderating effect on the relationship between niche width and sustainable development.
Hypothesis 3a (H3a). The degree of network embeddedness is high, and niche width has a greater negative impact on financial performance; in other words, when the degree of network embeddedness is high, the financial performance of firms with larger niche width is poorer, which is more obvious than when the degree of network embeddedness is low.
Hypothesis 3b (H3b). The degree of network embeddedness is high and the niche width has a greater negative impact on nonfinancial performance; in other words, when the degree of network embeddedness is high, the nonfinancial performance of firms with larger niche width is poorer, which is more obvious than when the degree of network embeddedness is low.
When the products and services provided by enterprises are more unique, the business activities in which they engage are different from those of their competitors, and the technical fields in which they invest in research and development are less involved. As a result, they need more special market information to assist them [
16,
43]. In order to improve the quality of information and obtain complex and rapidly changing information, enterprises usually use highly embedded network relationships in order to ensure the correctness of information and obtain more favorable information [
44,
45]. Therefore, in highly embedded network relationships, enterprises can obtain complete and reliable market information that is conducive to the development of special products and services, operating modes, technical research, and so on, thus achieving better performance. Therefore, the inference hypotheses of this study are as follows:
Hypothesis 4 (H4). The degree of network embeddedness has a moderating effect on the relationship between niche specificity and sustainable development.
Hypothesis 4a (H4a). The degree of network embeddedness is high and niche specificity has a greater positive impact on financial performance; in other words, when the degree of network embeddedness is high, the financial performance of firms with higher niche specificity is better, which is more obvious than when the degree of network embeddedness is low.
Hypothesis 4b (H4b). The degree of network embeddedness is high and niche specificity has a greater positive impact on nonfinancial performance; in other words, when the degree of network embeddedness is high, the nonfinancial performance of firms with high niche specificity is better, which is more obvious than when the degree of network embeddedness is low.
Enterprises have at least three kinds of capital with regard to commercial competition. The first is financial capital, including cash, bank deposits, investment returns, and lending channels. The second is human capital, which combines its own characteristics—charm, health, intelligence, and appearance—with skills acquired through formal education and work experience to enable people to excel over others in certain jobs. The third is social capital, or relationships with other manufacturers. Generally, social capital determines the rate of return on investment of a competitive enterprise, and certain conditions in the network structure and the position of its related parties in the whole social network structure will bring some competitive advantages to obtain higher rates of return on investment [
11,
46,
47].
Under certain other conditions, having a large and diversified network relationship can ensure, to the greatest extent, that the related parties are in a place where valuable information is transmitted. However, if the network size is increased without considering the diversity of relationships, the function of the network will be weakened. Therefore, the key to increasing the network size is to increase the number of nonredundant contacts [
11]. In other words, enterprises should create more unconnected structural holes to act as bridges between small groups in order to achieve the efficiency of information flow and diffusion [
48,
49]. Enterprises centered in structural holes can develop new insights, especially regarding emerging opportunities and threats [
50]. However, when an enterprise joins a group, it is bound by the norms of the group. The more groups that participate, the greater the impact of the constraints on their behaviors and decisions. Therefore, when it comes to different subgroups, the network will be affected by the norms of the subgroups and will be more restricted. Enterprises that play a central role instead lose the autonomy of decision-making and behavior and become the biggest victims [
36,
51].
Widely operated enterprises, which provide products and services to customers in a variety of target markets or industries, engage in a variety of upstream and downstream value activities and invest in research and development activities in a variety of technical fields, spreading their resources among various spaces and striving for a central position in the market [
27,
52]. If a generalist organization is linked to a variety of network relationships, it must meet the requirements and norms of the members of the network in order to survive. The resources of the enterprise will be excessively dispersed to the different network relationships, resulting in an inability and lack of flexibility to cope with the impact of low-order or emerging markets. In contrast, specialist enterprises that provide products and services to customers in a single or a few target markets or industries, engage in single or a few upstream and downstream value activities, and invest in research and development activities in a single or a few technical fields lack diversified market information. If multiple network relationships can be obtained, valuable heterogeneous market information can be obtained, and competitiveness can be improved [
53]. Based on the above discussion, centering a generalist organization with multiple resources and information will lead to an excessive dispersion of resources, which will be further regulated and restricted by more core manufacturers. Professional organizations that lack resources and market information can improve their capabilities through the resources and information provided by different network relationships. Therefore, the inference hypotheses of this study are as follows:
Hypothesis 5 (H5). The degree of network centrality has a moderating effect on the relationship between niche width and sustainable development.
Hypothesis 5a (H5a). The degree of network centrality is high, and niche width has a greater negative impact on financial performance; in other words, when the degree of network centrality is high, the financial performance of firms with larger niche width is poorer, which is more obvious than when the degree of network centrality is low.
Hypothesis 5b (H5b). The degree of network centrality is high and niche width has a greater negative impact on nonfinancial performance; in other words, when the degree of network centrality is high, the nonfinancial performance of firms with larger niche width is poorer, which is more obvious than when the degree of network centrality is low.
When the products and services of enterprises are more unique, their business activities are different from those of their competitors, and their technical fields are covered less by competitors; thus, they need the assistance of more unique market information [
2,
16]. Enterprises that obtain links between multiple network relationships can obtain market information with unique characteristics, heterogeneity, and high value [
53], which enables them to promote the development of special industries and products, operation modes, and technological research and development. However, too many network relationships that are not connected with one another will reduce the quality of information. It is impossible to ensure the reliability of market information and obtain more knowledge through repeated inspections [
44,
45], which will usually affect enterprise performance in developing a special niche [
2,
16]. Moreover, if they participate in too many network relationships, enterprises will be constrained by members in various relationships [
36,
51], affecting their behavior and decisions in response to environmental changes. Their prior location can enable enterprises with a special niche to obtain multiple supports and nonrepetitive market information; help develop special products, operating processes, and technological research; and improve their business performance. However, being highly centered in different network relationships will affect the reliability of market information and reduce the business performance of enterprises in the special niche. Therefore, the inference hypotheses of this study are as follows:
Hypothesis 6 (H6). The degree of network centrality has a moderating effect on the relationship between niche specificity and sustainable development.
Hypothesis 6a (H6a). The degree of network centrality is high, and niche specificity has a less positive impact on financial performance; in other words, when the degree of network centrality is low, the financial performance of firms with higher niche specificity is better, which is more obvious than when the degree of network centrality is high.
Hypothesis 6b (H6b). The degree of network centrality is high and niche specificity has less positive impact on nonfinancial performance; in other words, when the degree of network centrality is low, the nonfinancial performance of firms with high niche specificity is better, which is more obvious than when the degree of network centrality is high.
5. Conclusions
5.1. When the External Environment Changes Unfavorably, the Financial Performance of Enterprises with a High Degree of Network Embeddedness and Large Niche Width Is Worse Than That of Enterprises with a Low Degree of Network Embeddedness
The results of the study show that the argument that widely run generalist enterprises have more abundant resources and capabilities than specialist enterprises to tolerate and adjust to the impact of environmental changes and can obtain better survival opportunities [
18] was not established by the survey. Although not statistically significant, the results show that the performance of specialist enterprises is better than that of generalist enterprises. In addition to the discussion regarding the empirical results, another possible reason is that enterprises disperse their product portfolios in many different target markets, operate many kinds of value activities, disperse research expenditures in many product markets, or disperse research and development activities in many industries, which will lead to an excessive dispersion of resources and an inability to focus on the target to make the maximum investment of energy and materials. Individual product, process, and technological niches only obtain limited energy and material support of the enterprise. In the face of intense competitive pressure, overall performance is usually affected by weak individual competitiveness [
10]. After adding the degree of network embedding as a regulating variable, it can be seen that when an enterprise is embedded in a network relationship in which the members are closely connected and specialize in specific product combinations, value activities, and research and development fields, and encounters adverse changes in the investment environment, its financial performance in terms of sales growth, asset return, turnover growth, etc., is still better than that of a generalist enterprise that distributes resources among various products, processes, and technology niches. This result is consistent with previous research. The influence of niche characteristics on enterprises must take into account contingency factors [
16,
27,
28,
29]. The conclusion here is that widely run enterprises that are engaged in a variety of product combinations, participate in a variety of value activities, and invest in research and development activities in a variety of technical fields disperse their internal resources in various niche spaces, strive for a central position in the market, and face more severe tests and competition [
27]. If they are embedded in tight network relationships, they often have discussions with customer manufacturers regarding the design of new products, the development of new technologies, and the improvement of product quality and cost. They have long been subject to the requirements of customers in mainstream markets and have developed the capabilities, organizational structure, and culture required by the value network. As a result, this type of enterprise cannot make effectively and timely decisions and respond to changes brought about by breakthrough innovations in the scientific and technological environment, which will further impact operations and affect the overall financial performance.
On the contrary, enterprises that specialize in specific product combinations, value activities, and research and development activities concentrate their internal resources in a single or a few niche spaces, and live at the edge of the market [
27]. They are attached to a certain supply system and are responsible for the production of key components. Their use of resources varies less than that of generalist organizations. In order to survive, it is necessary to contact other members of the network and establish external relationships to seek support and assistance [
28,
38]. Embedded in tight network relationships, professional enterprises can enhance their importance in the supply system by regularly discussing new product designs, developing new technologies, and improving product quality and cost with customer manufacturers and meeting their requirements. At the same time, enterprises can also promote the accumulation of knowledge and exchange important information and management technologies [
34,
40], improving their financial performance in terms of sales growth, asset return, and turnover growth.
5.2. When the External Environment Changes Unfavorably, the Financial Performance of Enterprises with a Low Degree of Network Centrality and High Niche Specificity Is Better Than That of Enterprises with a High Degree of Network Centrality
Niche theory holds that when the number of enterprises relying on similar resource spaces increases, the space for growth will be squeezed, leading to niche crowding, which will further intensify competition [
24,
25,
29,
61]. Consistent with the arguments of Echols and Tsai (2005) and Porter (1996), the results of this study show that enterprises with unique products, processes, and technological niches that are different from those of their competitors can obtain better financial performance in terms of sales growth, asset return, and turnover growth due to the difference in product mix, value activities, and technological fields invested in research and development between enterprises, facing less competitive pressure, and avoiding falling into the dilemma of price reduction competition. The overall operating performance of the company is better than that of other enterprises in the same industry, which can provide better treatment for employees and improve their learning-and-growth performance in terms of satisfaction with the company, increased self-ability, and involuntary turnover.
At the same time, the knowledge and technology that enterprises learn from their business activities are usually unique and difficult to imitate and replace, which leads them to continuously invest resources, engage in effective research and development, and adopt special technologies in order to enhance their ability to design new products, quickly respond to customer manufacturers’ requirements for products and services, and meet their requirements for delivery time, thus increasing customer satisfaction and willingness to continuously purchase the company’s products. After adding the degree of network intermediation as a regulating variable, we found that the product mix, value activities of management, and technical fields invested in the research and development of enterprises with high niche specificity are different from those of competitors. If we can contact customers that sell products to different countries or regions and target markets, and products can be applied to different industries and other faces, we can connect through these network relationships and obtain unique, heterogeneous, and valuable market information that is helpful to the special niche [
53], fully apply the special product, process, and technology niche of the enterprise to various target markets, and obtain better financial performance such as sales growth, asset return, and turnover growth.
However, a low degree of network centrality leads to a more effective relationship between niche specificity and financial performance. One possible reason is that too many network relationships that are not connected with each other will reduce the quality of information, and it is impossible to ensure the reliability of market information and obtain more knowledge through repeated inspection [
45]. Usually, it will affect the performance of enterprises in developing their special niche [
16] and will be constrained by members of various groups. This result is consistent with the argument of structural holes, as well as with Simmel’s viewpoint [
51], which indicates that the norms of members in network relationships will restrict enterprise behavior and decision-making, and will be constrained by various norms formulated by members of the network. In turn, this will lead to a failure to respond to environmental changes in a timely manner and affect the financial performance in terms of sales growth, asset return, turnover growth, etc.
5.3. Management Research and Policy Recommendations
Management research has paid more attention to interactions between enterprises and other organizations of interest in the external environment. However, the lack of a niche theory indicates that the sustainable development of many enterprises may depend on establishing cooperative and symbiotic network relationships with core vendors (customer vendors) in the ecosystem and obtaining the necessary resources from these relationships. This study combines the two viewpoints to explain that when organizations acquire external resources through network links, they can not only acquire surplus resources and capabilities (a characteristic of generalist organizations), but also cope with changes in the environment without burdening organizations when the environment is stable (a characteristic of specialist organizations). Furthermore, the existing network research is mainly based on the dual relationship or overall network structure. This research uses the subgroup–network group view of network relationships to discuss the influence of network connections on enterprises, in order to better understand their opportunities to survive and develop. A dual relationship is a relationship between two actors. This is the simplest and most basic form of a social network, and the basis for the analysis of various ties.
Understanding the determinants of business performance is important for every company. The results of this study provide a direction for managers to obtain performance benefits in their niche positioning. The results point out that niche width strategy cannot affect the performance of an enterprise alone when the external environment changes unfavorably, and the degree of interaction and embeddedness with customers and manufacturers must be examined. The results also point out that when the external environment changes unfavorably, enterprises with higher niche specificity cannot be easily replaced by other niche manufacturers. At the same time, enterprises that adopt a special niche strategy not only can obtain unique, heterogeneous, and valuable market information, but also cannot be restrained by the norms of core manufacturers if they can moderate the different network relationships. There are many Taiwanese firms in various niche forms in the investment market of China; two examples are TM Company and YCM Company, which are responsible for the professional design, integration, and assembly of machine tools. Their products can be used as processing machines for manufacturing the metal parts of mechanical equipment as well as industrial metal parts for automobiles, aerospace, national defense, machinery, molds, electronics, generators, etc. In addition, some processes or components and consumables in high-tech industries such as semiconductors and panels must be manufactured with machine tools, with very wide applications. In addition, companies such as H Company, which manufactures industrial chillers, HT Company, which manufactures paper products, and Company t, which designs and manufactures computer radiators, are specialist enterprises that are more focused on niche markets. It is generally believed that generalist enterprises will perform better than specialist enterprises in terms of competition intensity, overall efficiency, industrial profitability, and customer satisfaction. However, this type of enterprise cannot avoid the impact of market competition and environmental changes. In many cases, they are even safer than professional enterprises, and often have to reduce weight. Professional enterprises often follow the strategy adopted by generalist enterprises, but they fall into crisis because they do not have the same scale. Therefore, generalist and specialist enterprises should have their own operating rules and strategies so as not to fall into the gray zone. Porter (1996) argued that firms that succeed at multiple strategies often do so by creating separate business units for each strategy. By separating the strategies into different units with different policies and even different cultures, a company is less likely to become stuck in the middle of a combination of generic strategies.
This study suggests that enterprise managers should think more comprehensively about their company’s competitive positioning. Taiwanese firms mostly adopt the strategy of helping internationally famous brand manufacturers form contracts. It is not enough to choose a favorable niche. Competitive positioning should take into account the core manufacturers that have cooperative symbiosis and parasitic relationships with their companies. The network relationship between these manufacturers usually provides market information and knowledge that is critical to sustainable development. Therefore, the important task of enterprise managers is to understand the interaction between their companies and the core manufacturers in the ecosystem and their positioning in the network relationship. All-round enterprises usually provide a wide range of related products and services for most major market customers. They are easily subject to the requirements of mainstream market customers for a long time, develop the capabilities, organizational structure, and culture required by the value network, and are unable to make effective and timely decisions and respond to changes brought about by breakthrough innovations in the scientific and technological environment. This study suggests that generalist Taiwanese firms can set up a dedicated unit (or organization) to monitor environmental changes in various regions at any time when operating in China, and target customers in emerging product markets (not the current mainstream market) so that they can serve different customer markets at the same time. Since it is extremely difficult to compete with all-round and versatile manufacturers with (i) complete products, (ii) a high degree of integration, and (iii) diversified technologies, this study suggests that professional Taiwanese firms should find their effective areas of specialization, adopt a strategy of cross-avoidance, avoid overlapping with other competitors, stabilize special niche markets, and develop their own characteristics. At the same time, they should set up a value network system with other core manufacturers (Taiwanese firms, Chinese firms, or other manufacturers) with different functions so as to embed themselves within such a network, which can not only focus on their own core niche, but also obtain surplus capacity and resources in response to changes in the overseas environment from the network.
5.4. Limitation and Recommendation
We must acknowledge several limitations of this study. First, the study relies on single-country data, which can limit its generalizability. We consider that future research can test the main results of this study through enterprise cases in other countries, and can even conduct comparative studies in different countries or industries. Second, although our study develops a predictive measure of sustainable development that applies to firms, it relies exclusively on financial and nonfinancial performance data. We believe that we can increase the indicators of innovation performance, including product innovation, process innovation, personnel exchange, and so on. Innovation is also the key to the sustainable development of enterprises. Finally, in addition to network relationships, we consider that institutional pressures are also an important contingency factor in our model. Institutional pressure brings constraints to the strategic choice of enterprises. Future research can enrich our model by adding other contingency variables of interest.