Abstract
Purpose
This study examines the strategy–performance relationship within publicly traded German firms. Strategic management literature provides several strategic frameworks that offer guidance on promising strategies. However, given major changes, such as globalization, managers wonder whether strategic frameworks are still applicable.
Design/methodology/approach
The authors employ principal component analysis (PCA) to measure competitive strategy and analyze a sample of 6,037 firm-years among 651 firms between 2000 and 2019.
Findings
While the authors find evidence for the existence of efficiency-based strategies, differentiation-based strategies and mixed strategies, only differentiation-based strategies are positively related to performance.
Originality/value
The study’s results contribute to the discourse on the strategy–performance relationship, as they provide insights into promising strategies that are of interest to researchers and practitioners. Further, the authors introduce a new measure of competitive strategy based on PCA.
This study examines the strategy–performance relationship within publicly traded German firms. Strategic management literature provides several strategic frameworks that offer guidance on promising strategies. However, given major changes, such as globalization, managers wonder whether strategic frameworks are still applicable.
Design/methodology/approach
The authors employ principal component analysis (PCA) to measure competitive strategy and analyze a sample of 6,037 firm-years among 651 firms between 2000 and 2019.
Findings
While the authors find evidence for the existence of efficiency-based strategies, differentiation-based strategies and mixed strategies, only differentiation-based strategies are positively related to performance.
Originality/value
The study’s results contribute to the discourse on the strategy–performance relationship, as they provide insights into promising strategies that are of interest to researchers and practitioners. Further, the authors introduce a new measure of competitive strategy based on PCA.
| Original language | English |
|---|---|
| Pages (from-to) | 516-532 |
| Journal | Journal of Strategy and Management |
| Volume | 16 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2023 |
| Externally published | Yes |