This research is driven by the phenomenon that occurred in Indonesian life insurance industry within the last decade wherein market share domination has shifted from the local life insurance companies to the joint-venture companies since 2006. The second phenomenon has been observed that Indonesian’s insurance market grows quite well though its market penetration is relatively lower than other ASEAN countries, such as; Malaysia and Thailand.
The purposes of the research is to obtain a dynamic competitive model as a decision support tool for a firm to decide its competitive strategy dynamically to optimize its performance in accordance to the tangible resources and dynamic capabilities of the firm and the insurance industry environment. The research is conducted by using panel data of 24 life insurance companies in Indonesia with time span between years 1996 to 2011.
Keywords: tangible resources, dynamic capabilities, industry environment, dynamic competitive strategy, and firm performance