scholarly journals Business Strategy, State-Owned Equity and Cost Stickiness: Evidence from Chinese Firms

2020 ◽  
Vol 12 (5) ◽  
pp. 1850
Author(s):  
Tingyong Zhong ◽  
Fangcheng Sun ◽  
Haiyan Zhou ◽  
Jeoung Yul Lee
Keyword(s):  
Business Strategy ◽  
Low Cost ◽  
Differentiation Strategy ◽  
Cost Strategy ◽  
Cost Behavior ◽  
Low Cost Strategy ◽  
The Cost ◽  
The Relationship ◽  
Management Expectations ◽  
Cost Stickiness

This paper investigates the relationship between business strategy and cost stickiness under different ownership. Using the data from listed firms in China from 2002 to 2015, we find that first, firms with different strategies exhibit different cost behavior. The cost stickiness of choosing a differentiation strategy is higher than that of choosing a low-cost strategy. Second, management expectations will affect cost stickiness. Optimistic expectations will increase cost stickiness, while pessimistic expectations will reduce cost stickiness. Third, management expectations can adjust the relationship between business strategy and cost stickiness in terms of government-created advantages (GCAs). If management expectations tend to be optimistic, the cost stickiness is higher with a differentiation strategy than with a low-cost strategy. If management expectations tend to be pessimistic, then cost stickiness is higher with a low-cost strategy than with a differentiation strategy. Finally, the state-owned equity affects the extent of the effect of a differentiation strategy on cost stickiness. State-owned firms, which receive more GCAs than non-state-owned firms, have stronger cost stickiness than non-state-owned firms, even if both categories of firms use more differentiation strategy.

scholarly journals ALIGNMENT BETWEEN THE SUPPLY, MANUFACTURING AND DISTRIBUTION STRATEGIES AND THE BUSINESS STRATEGY

2010 ◽  
Vol 3 (2) ◽  
pp. 44 ◽  
Author(s):  
Margareth Rodrigues de Carvalho Borella ◽  
Antônio Domingos Padula
Keyword(s):  
Business Strategy ◽  
Business Performance ◽  
Low Cost ◽  
Business Strategies ◽  
Profile Deviation ◽  
Cost Strategy ◽  
Low Cost Strategy ◽  
The One ◽  
High Degree ◽  
The Relationship

The study aims to identify the degree of alignment between the supply, manufacturing and distribution practices on the one hand and the generic business strategies suggested by Porter (1996): differentiation, low cost, focus on differentiation and focus on low cost on the other and to obtain some insights into how these relationships influence business performance. The gestalt and profile deviation (Venkatraman, 1989) approaches were used to identify the relationship between practices and the degrees of alignment in the respective strategy groups. When compared to other strategy groups, the group of companies predominantly devoted to the Focus on Low Cost strategy (49,25%) was found to have: greater consistency in the development of practices between supply, manufacturing and distribution, a high degree of alignment of most of these practices with that strategy, a greater tendency towards achieving better business performance.

scholarly journals An Analysis of a Strategic Transformation Plan: The Case of Alaska Airlines

2013 ◽  
Author(s):  
Paul Caster ◽  
Carl Scheraga
Keyword(s):  
Product Differentiation ◽  
Airline Industry ◽  
Low Cost ◽  
Operating Income ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Cost Strategy ◽  
Low Cost Strategy ◽  
Network Carrier ◽  
Strategic Transformation

In 2003, amid the turmoil of the U.S. airline industry in the post-9/11 environment, the senior management of the Alaska Air Group announced a “strategic vision” entitled “Alaska 2010.” The pronouncement articulated positions with regard to cost leadership, product differentiation, and growth. This study empirically assesses the efficacy of this decision with regard to the major network carrier of the air group, Alaska Airlines. The analysis focuses on the period beginning with the announcement and ending in 2010.The implementation of such a strategic protocol is dynamic and inter-temporal in nature. Therefore, it is often difficult to assess the effectiveness of changes in strategies, particularly since such effectiveness is often a function of the confounding forces of organizational strategy and market conditions. Thus, this study utilizes the multi-period methodology of the strategic variance analysis of operating income.This methodology decomposes operating income into three components: (1) growth, (2) price recovery, and (3) productivity. This is of particular interest from a strategic planning perspective, as the price component evaluates a company’s product differentiation strategy while the productivity component evaluates whether an airline’s low cost strategy was successful because of efficiency gains.

Impact of Porter’s Generic Strategy on Firm Performance with reference to Nepalese Retail Banking Sector

2021 ◽  
Vol 4 (i) ◽  
Keyword(s):  
Regression Analysis ◽  
Firm Performance ◽  
Low Cost ◽  
Differentiation Strategy ◽  
Cost Strategy ◽  
Generic Strategy ◽  
Low Cost Strategy ◽  
Focus Strategy ◽  
Generic Strategies ◽  
Focus Strategies

Porter’s generic strategies are the proven and pervasive strategic options in achieving competitiveness and better firm performance. This paper aims in examining the effect of Porter’s generic strategies (low-cost, differentiation, and focus) on firm performance in the context of Nepalese retail banks, a more competitive service industry. This study applies casual comparative research design and the data have been collected through administering questionnaire survey from 75 senior bank managers of 18 Nepalese commercial banks who being engaged in strategic affairs. The econometric model has been constructed to measure the expected effect of the strategies on firm performance. The descriptive analysis, Pearson’s correlation analysis, and multivariate regression analysis were conducted. The empirical results of correlation analysis and multiple regression analysis produced consistent results indicating positive associations between generic strategies and firm performance. The empirical results from regression analysis declared higher positive and significant impact of low-cost on firm performance. Similarly, positive effect of differentiation strategy and focus strategy on firm performance was reported. The findings suggested that pursuing low cost strategy provides more financial returns with comparison to differentiation and focus strategies. The finding also suggested for combination of low-cost and differentiation (and focus) strategies could provide better competitiveness and firm performance. Keywords: Generic Strategy, Low-cost strategy, Differentiation strategy, Focus strategy, Firm performance

scholarly journals The Combinations of Market and Non-Market Strategies That Facilitates Family Firm Survival

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Rodrigo Basco ◽  
Ana Isabel Rodríguez-Escudero ◽  
Natalia Martin Cruz ◽  
Ismael Barros-Contreras
Keyword(s):  
Family Business ◽  
Strategic Behavior ◽  
Family Firms ◽  
Low Cost ◽  
Business Systems ◽  
Differentiation Strategy ◽  
Family Enterprise ◽  
Kaplan Meier ◽  
Cost Strategy ◽  
Low Cost Strategy

AbstractEven though family firms are characterized by an overlap between the family and business systems, family business research has focused separately on how family firms compete (i. e., strategic behavior) and how families are involved their firms (i. e., types of family orientation). With the aim of closing this research gap, we draw on the heterogeneity principle of family firms and the equifinality principle of the configurative approach to conjecture that family firms can successfully adjust their strategic behavior and family business orientation in a variety of ways to enhance their likelihood of survival. We follow a sample of Spanish family firms over an 11-year period (2004–2015) to test our model. Based on the Kaplan–Meier survival estimator and the Cox proportional hazard model, we find that survival likelihood is higher when firms combine a differentiation strategy with a business-first or a family-enterprise-first orientation or when firms follow a low-cost strategy with a family-first orientation.

scholarly journals JSE listed companies in the food and drug retail sector: A content analysis of financial statements to determine their primary purpose

2016 ◽  
Vol 9 (3) ◽  
pp. 927-950
Author(s):  
Vanessa Gregory ◽  
Mihalis Chasomeris
Keyword(s):  
Low Cost ◽  
Financial Statements ◽  
Listed Companies ◽  
Retail Sector ◽  
Differentiation Strategy ◽  
Conscious Capitalism ◽  
Cost Strategy ◽  
Content Analyses ◽  
Low Cost Strategy ◽  
Sustainability Model

The overall purpose of the study is to analyse financial statements to determine the primary purpose of JSE listed companies in the food and drug retail sector. There were two parts to the analyses. First, the study examines the literature on the three models, namely: neoclassical, conscious capitalism and entity maximisation and sustainability in order to identify themes or major identifiers of each model. Second, it analyses the financial statements (over five years from 2010 to 2014) of JSE listed companies in the food and drug retail sector, in particular the non-financial information. The entire population was analysed as there were only four in the population, namely SPAR, Pick n Pay, Shoprite and Clicks. Annual integrated reports and sustainability reports (where separately published) were analysed using content analyses. Keywords and themes were used to link the attributes of the company to the attributes identified in the literature to determine the model the company used. The content analyses showed that the dominant model was the entity maximisation and sustainability model. However, each company appears to have chosen to focus on a different stakeholder: SPAR on employees, Pick n Pay on customers (with a differentiation strategy), Shoprite on customers (with a low cost strategy) and Clicks on shareholders.

Low-Cost Strategy Factors in Airline Industry: The AirAsia Case

2013 ◽  
Vol 845 ◽  
pp. 652-657
Author(s):  
Alireza Rangraz Jeddi ◽  
Nafiseh Ghorbani Renani ◽  
Alireza Khademi ◽  
Vahid Shokri ◽  
Mohd Yusof Noordin
Keyword(s):  
Airline Industry ◽  
Success Factors ◽  
Low Cost ◽  
Air Transportation ◽  
Key Success Factors ◽  
Se Asia ◽  
Cost Strategy ◽  
Important Barrier ◽  
Low Cost Strategy ◽  
The Cost

Demand for air transportation has boomed extensively in Southeast (SE) Asia during the past decade as a result of economic development and the lack of land routes between destinations. The purpose of this study is to focus on the cost-leadership competitive strategy applied by low-cost carriers (LCCs) in SE Asia airlines and explore the elements that affect the competing capability of these airlines in the region. Furthermore, the study attempts to illustrate the key success factors that have resulted in the superiority of AirAsia (AA) airline among other LCCs airlines in the competitive market of SE Asia. The research shows that the regulatory environment in the regions air transportation business is an important barrier for the development of local LCCs airlines. Hence, AA attempts to cope with these barriers have been illustrated in this research.

scholarly journals A Strategic Variance Analysis of the Profitability of U.S. Network Air Carriers

2011 ◽  
Author(s):  
Paul Caster ◽  
Carl A. Scheraga
Keyword(s):  
Product Differentiation ◽  
Planning Process ◽  
Low Cost ◽  
Variance Analysis ◽  
Operating Income ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Cost Strategy ◽  
Low Cost Strategy ◽  
Air Carriers

Airlines, as part of their strategic planning process, articulate positions with regard to cost leadership, product differentiation, and growth. Decisions implemented are dynamic and inter-temporal in nature. Therefore, it is often difficult to assess the effectiveness of changes in strategies, particularly since such effectiveness is often a function of the confounding forces of organizational strategy and market conditions. Managers thus need a multi-period methodology to evaluate the implementation of strategic positions. One such approach is the strategic variance analysis of operating income. Horngren et al. (2000, 2006, 2012) demonstrate a methodological template for decomposing operating income into three components: (1) growth, (2) price recovery, and (3) productivity. It is suggested that the price recovery component assesses a firm’s product differentiation strategy and that the productivity component assesses a firm’s low-cost strategy. Thus, this framework is very much in the spirit of Porter’s (1980) seminal work.This study examines U.S. network airlines in the post-9/11 environment. Utilizing the above methodology, it first identifies comparative strategic positions across airlines and then assesses the implementation efficacy of these positions.

scholarly journals Industry Environment And Business Strategy: A Comparison Of Contingency Theory Expectations And Relationships Between Small Manufacturing Firm Managers Perceptions Of Environment And Strategy

2011 ◽  
Vol 1 (8) ◽  
Author(s):  
Alfred M. Pelham ◽  
Pamela Lieb
Keyword(s):  
Contingency Theory ◽  
Low Cost ◽  
Positive Association ◽  
Sales Managers ◽  
Differentiation Strategy ◽  
Cost Strategy ◽  
Industry Environment ◽  
Market Turbulence ◽  
Low Cost Strategy ◽  
Customer Differentiation

Contingency theory suggests that that an appropriate match must be made between strategy and industry environment conditions. This study compared contingency theory expectations with the associations between perceptions of industry environment conditions and reported firm strategy, as reported by the firms president and national sales manager. Confirming theory expectations, there were significant and positive associations between perceived industry technical/market turbulence and reported growth/differentiation strategy as well as significant and negative associations with low cost strategy. The direction and significance of these associations were similar regardless of which manager supplied the perception of technical/market turbulence or the reported strategy. However there were differences across the two managers reports in the associations between strategy and perceptions of product differentiation, customer differentiation, and competitive intensity. Confirming theory expectations, there were significant and positive associations between perceptions of industry competitive intensity and the sales managers reported use of low cost strategy, but not the presidents reported use of that strategy. Confirming theory expectations, there was a significant and positive association between the presidents (but not the sales managers) perceptions of industry product differentiation and managers reported use of growth/differentiation strategy. There was a significant and positive association between the sales managers (but not the presidents) perceptions of industry customer differentiation and managers reported use of growth/differentiation strategy. The presidents and sales managers perceptions of product and customer differentiation had significant negative associations with the sales managers (but not the presidents) reported use of low cost strategy. The authors discuss potential explanations for these results and implications for managers.

scholarly journals Innovative low-cost strategy and firm performance of restaurants

2019 ◽  
Vol 13 (3) ◽  
pp. 266-281 ◽  
Author(s):  
Collins Kankam-Kwarteng ◽  
Barbara Osman ◽  
Jacob Donkor
Keyword(s):  
Firm Performance ◽  
High Performance ◽  
Low Cost ◽  
Competitive Intensity ◽  
Content Type ◽  
Interaction Terms ◽  
Cost Strategy ◽  
Low Cost Strategy ◽  
The Relationship

Purpose The purpose of this paper is to improve the appreciation of the moderating role of competitive intensity on the relationship between low-cost strategy and firm performance of restaurants. Design/methodology/approach The study uses empirical data collected from 118 restaurants operators, Ghana. The effects of relationships and the interaction of low-cost strategy and competitive intensity were tested using regression analysis. Findings The findings indicate the existence of a significant positive relationship between low-cost strategy and firm performance. The effect of competitive strategy on firm performance was found to be partially significant. The findings revealed that competitive intensity does moderate the relationship between low-cost strategy and firm performance of restaurants. Practical implications Implications of the findings for restaurant operators suggest that effective application of low-cost strategy and monitoring and managing competitive intensity results in high performance. Originality/value This study contributes to the existing literature on low-cost strategy, competitive intensity and firm performance. More specifically, the interaction terms of low-cost strategy and competitive intensity have been explored in this study and can be used for further investigations.

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