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The purpose of this paper is to propose that a firm could exploit the ties of interfirm network to access external network resources (NR) to assist its sensing and responding capabilities for the variability of business environment, thereby leading to superior organizational performance.

This study uses the survey data collected from 260 small- and medium-sized enterprises (SMEs) in Taiwan to examine the causal effects of hypotheses testing. By adopting structural equation modeling technology, the direct and mediating effects among the NR, sensing capability (SC), responding capability (RC) and firm performance (FP) are explored.

The result of this paper shows that a firm’s NR and its organizational capabilities are critical antecedents of FP. Moreover, the mediating testing identifies NR and FP as being mediated by a firm’s organizational agility (OA) and RC.

The findings of this paper provide practical evidence that a SME could gain benefits and advantages from the joint effect of integrating NR and OA to compete with global conglomerates. Thus, a SME must put more effort into developing and maintaining its interfirm network and then figuring out its effect with its internal agility process in order to surmount unexpected changes, create advantages of the first-mover and innovation activities and boost the FP.

This paper combines external NR and internal OA and offers a practical strategy to a SME, creating a unique competitive advantage for further development in a dynamic business environment.

This paper highlights cooperation as an important moderating condition of competitive action and response. Drawing on a new perspective of collective identity on competitive dynamics, the purpose of this paper is to stress the impacts of market commonalities and resource similarities on competitive actions and responses and focus on the moderating effect of cooperation on the relationships mentioned above.

This study employs logistic regression analysis to test the hypotheses in the Taiwanese flour industry at the period 2002–2005.

The results indicate market commonalities and resource similarities have a negative effect on the likelihood of a price-competitive action and a price-competitive response. Moreover, the level of cooperation among firms moderates the relationships among market commonalities, resource similarities, price-competitive actions, and price-competitive responses.

To understand and predict competitive behavior help firms to control and avoid unnecessary rivalry and therefore maintain mutual forbearance with competitors.

This study provides a new angle on cooperation-level analysis, contributing the use of collective identity theory to analyze the moderating effects of cooperation on competitive actions and responses.