"Generic strategies and performance – evidence from manufacturing firms" de M.K. Nandakumar, Abby Ghobadian e Nicholas O’Regan, publicado por International Journal of Productivity and Performance Management Vol. 60 No. 3, 2011.
"The results of this study indicate that firms adopting one of the strategies, namely cost-leadership or differentiation, perform better than “stuck-in-the-middle” firms which do not have a dominant strategic orientation. The integrated strategy group has lower performance compared with cost-leaders and differentiators in terms of financial performance measures. This provides support for Porter’s view that combination strategies are unlikely to be effective in organisations. However, the cost-leadership and differentiation strategies were not strongly correlated with the financial performance measures indicating the limitations of Porter’s generic strategies in explaining performance heterogeneity in organisations.
The organisations belonging to the sample were classified into four strategic groups namely cost-leadership, differentiation, integrated strategy and stuck-in-the-middle and their performance was compared. The first three groups have clearly defined business-level strategies and they should perform better than the stuck-in-the-middle group, which does not have a clear strategy.
The following hypotheses have been formulated to assess the nature of relationship between business-level strategy and performance:
- H1. Organisations having a clear business-level strategy by adopting one of the strategies namely cost-leadership, differentiation or integrated strategies will perform better than those organisations which are stuck-in-the-middle.
- H2. Organisations following integrated strategies will perform better than those pursuing either a cost-leadership strategy or a differentiation strategy.
H1 and H2 indicate that cost-leaders and differentiators performed better than stuck-in-the-middle companies in terms of both the subjective and objective performance measures.
Firms pursuing an integrated strategy performed better than stuck-in-the-middle firms in terms of all performance measures except ROA. The cost-leaders and differentiators performed better than the organisations following integrated strategy when the financial performance measures were the dependent variables. This indicates that integrated strategies are not as effective as cost-leadership and differentiation strategies for improving financial performance. This finding provides support to Porter’s view that combination strategies may not always be effective in organisations. It also confirms the findings of some studies (e.g. Kumar et al., 1997) which found that firms adopting integrated strategies performed poorly."