Positioning decisions within strategic groups

2014 ◽  
Vol 52 (10) ◽  
pp. 1858-1887 ◽  
Author(s):  
Xiao Duan ◽  
Zhan-ming Jin
Keyword(s):  
Firm Performance ◽  
Performance Comparison ◽  
Annual Reports ◽  
Corporate Diversification ◽  
Strategic Groups ◽  
Strategic Positioning ◽  
Strategic Group ◽  
Content Type ◽  
Two Factors ◽  
Negative Effect

Purpose – Strategic group has been intensively studied since this term emerged in 1970s, but previous studies have been limited to the comparisons between groups such as performance comparison. The purpose of this paper is to explore the internal structure of strategic groups by examining the effect of strategic distance from a firm to the center of its strategic group on firm performance. Design/methodology/approach – The research is based on data acquired from the annual reports of listed companies and some Chinese domestic databases, including CSMAR Solution, WIND financial database, and China Core Newspapers Full-text Database. After grouping listed pharmaceutical companies in China over the period 2010-2011, the authors test three hypotheses by using fixed effect regressions. Findings – The paper finds that the strategic distance from a firm to the center of its strategic group has a significant negative effect on the firm's financial performance. Two factors are discovered to influence that effect: corporate diversification strengthens the negative effect of strategic distance on performance, while firm's media visibility weakens that negative effect. Originality/value – The findings reveal the relationship between intra-group strategic positioning and firm performance, and specify how firms can gain competitive advantage through positioning choices and strategic actions. This study promotes the establishment of a more comprehensive strategic group theory by revealing the structure within strategic groups.

Regulation and strategic group dynamics of the Nigerian telecommunications industry

2014 ◽  
Vol 5 (2) ◽  
pp. 209-232
Author(s):  
Olawale Oladipo Adejuwon
Keyword(s):  
Firm Performance ◽  
Group Dynamics ◽  
Empirical Studies ◽  
Telecommunications Industry ◽  
Competitive Behavior ◽  
Strategic Groups ◽  
Data Set ◽  
Strategic Group ◽  
Content Type ◽  
Competitive Actions

Purpose – In order to achieve a desirable level of market efficiency, regulators need to identify the strategic groups within an industry and understand the way the constituent groups relate to one another. The paper aims to discuss these issues. Design/methodology/approach – In the current study, factors that may lead to strategic group formation were developed and used as clustering variables in a k-means cluster statistical analysis to categorize the firms into strategic groups. The factors used are entry costs, timing of entry, technology type and scope of operations. In addition, the number and type of competitive actions employed by the firms in the industry were identified by structured content analysis of a public source. The competitive actions were used to examine the dynamics of the resulting groups within the context of competitive behavior, resource and scope commitments and corporate social responsibility (CSR) actions. In addition, χ2 analysis was employed to ascertain the likelihood that actions of a firm will be responded to by firms from the same group or from outside the group. Findings – License fees was found to be the most significant clustering variable. The study also showed that groups with significantly higher license fees carried out considerably more competitive actions, had higher resource and scope commitments and executed more CSR actions. In addition, the study revealed significantly more competition within strategic groups than between groups. Research limitations/implications – The absence of financial records for firms in the sample necessitated the use of CSR activity as a measure of firm performance. Some empirical studies have shown strong links between CSR and firm performance. Practical implications – The study revealed high mobility barriers which prevent ease of movement of firms in the industry from one strategic group to the other. Therefore regulators who wish to promote competition must do so by identifying the strategic groups with significant market power and permitting entry not by lowering entry barriers but by allowing the entry of firms with proven resources similar to the firms in those groups and to stipulate similar commitments in entry conditions. The results also offer management practitioners an insight into competitive behavior in the industry. Originality/value – The study utilized a unique data set (competitive actions of firms in the Nigerian Telecommunications industry as reported in the media) in contributing to empirical studies on competitive dynamics and strategic group literature.

Does digitalization create or reduce perceived global value?

2018 ◽  
Vol 35 (7) ◽  
pp. 676-687 ◽  
Author(s):  
Ibtissame Abaidi ◽  
Eric Vernette
Keyword(s):  
Undergraduate Students ◽  
Large Scale ◽  
Costs And Benefits ◽  
Content Type ◽  
Complex Effect ◽  
Digital Format ◽  
Two Factors ◽  
Negative Effect ◽  
Cost And Benefit Analysis ◽  
Print Format

PurposeThe internet has made it possible to diffuse totally digitized products on a very large scale. The newspaper business is one of the sectors that has been most affected by this technological revolution. Given such products’ uneven commercial success, an analysis of the literature suggests that these mixed results could be explained by the digitized nature of the product combined with a price judged too high. Both these elements reduce the perceived global value of the digital support compared with the print version on paper. To test this proposition, the authors have constructed an experimental design, manipulating the format (digital newspaper vs. print newspaper) and the price (high vs low). The results show that newspaper digitization significantly reduces perceived global value for the consumer compared with the print format. The authors also show that the perceived intangibility of the product exerts a more complex effect on perceived global value: this effect depends on both the nature of the intangibility (mental vs physical) and the cost and benefit analysis.Design/methodology/approachAn experimental study was conducted with two factors: digitalization (print vs digital format) and price (low vs high). The authors carried out a mixed-factor variance analysis and follow Preacher and Hayes procedure to test the hypothesis. A sample of 387 undergraduate students was interviewed in laboratory.FindingsThe results show that newspaper digitization significantly reduces (i.e. destroys) perceived global value for the consumer (i.e. it destroys value), compared to the print format. The reuslts also show that the perceived intangibility of the product exerts a more complex effect on perceived global value: this effect depends at the same time on the nature of the intangibility (mental vs physical) and the account taken of costs and benefits.Originality/valueOne major result is the fact that digitizing newspaper strongly destroys its perceived global value for the consumer, compared to the physical alternative. To explain this phenomenon, the product’s perceived intangibility had been considered, as well as how this is related to the perceived costs and benefits. It appears that it has an overall direct negative effect on perceived value; therefore, the more a newspaper format is perceived as physically intangible, the more its perceived global value decreases. Results shows that this loss of value can be counteracted in two different ways, through the indirect effects of costs and benefits.

Chinese perception and willingness to buy Taiwanese brands

2018 ◽  
Vol 30 (4) ◽  
pp. 816-836 ◽  
Author(s):  
Nizar Souiden ◽  
Riadh Ladhari ◽  
Liu Chang
Keyword(s):  
Structural Equation ◽  
Equation Modeling ◽  
Strong Ties ◽  
Content Type ◽  
Foreign Companies ◽  
Brand Quality ◽  
Willingness To Buy ◽  
Two Factors ◽  
Negative Effect ◽  
The Impact

Purpose The purpose of this paper is to examine ethnocentrism and animosity in a special context of two societies that share cultural, historical, ethnic and geographical characteristics. In particular, it first investigates the relationships between Chinese ethnocentrism and animosity toward Taiwan, and then it examines the impact of these two factors on the Chinese perception of Taiwanese brand quality and their purchase intent. Design/methodology/approach Based on a sample of 605 respondents from China, data were analyzed by structural equation modeling. Findings The results show that although Chinese animosity toward Taiwan is moderate, it is significantly driven by ethnocentrism, which has a significant and negative effect on willingness to buy, but not on the perception of Taiwanese brand quality. The Chinese animosity toward Taiwan, however, has negative and significant effects on their perception of Taiwanese brand quality and their intention of purchasing Taiwanese brands. Research limitations/implications The immense size of the country has impeded the representativeness of the authors’ sample and the generalizability of the results. Also, the study covers only one type of product. Practical implications Forming partnerships with local Chinese businesses and developing strong ties with local communities could be considered as a solution to minimize or circumvent the effect of animosity and might help foreign companies appear more “local.” Originality/value In contrast to past studies that investigated ethnocentrism and animosity in the context of countries presenting several differences (e.g. China vs USA), this study investigates the effect of ethnocentrism and animosity in the context of two countries (China and Taiwan) that share cultural, historical, ethnic and geographic characteristics. Despite the strong ties between the two countries, the Chinese have a certain animosity, though moderate, toward Taiwan and consequently are less inclined to buy Taiwanese brands. This implies that Chinese animosity toward a country may be toned down or pronounced, depending on whether they have strong or weak ties with that country.

CEO compensation, CEO attributes and tax aggressiveness: evidence from French firms listed on the CAC 40

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sawssan Jbir ◽  
Souhir Neifar ◽  
Yosra Makni Fourati
Keyword(s):  
Ceo Compensation ◽  
Chief Executive ◽  
Least Square ◽  
Annual Reports ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Ceo Tenure ◽  
Negative Effect ◽  
The Impact ◽  
Ceo Attributes

Purpose This paper aims to examine the impact of CEO (chief executive officer) compensation and CEO attributes on the level of tax aggressiveness of French companies. Design/methodology/approach The sample comprises 180 firm-year observations of 40 companies listed on the CAC 40 during the period ranging from 2008 to 2018. For the purpose of overcoming the problems of heteroscedasticity and autocorrelation, the authors apply the generalized least square panel regression. Findings This study’s results corroborate the importance of CEO compensation and CEO attributes as determinants of tax aggressiveness. In addition, the authors come up with the fact that CEO compensation has a negative effect on tax aggressiveness, and that older CEOs and CEOs with accounting expertise are negatively linked with tax aggressiveness. The authors also find out that there is a positive relationship between the CEO tenure and tax aggressiveness. Moreover, the authors report that foreign CEOs are more likely to engage in tax aggressiveness practices than local CEOs. Research limitations/implications The unavailability of all annual reports and the use of only one proxy to measure tax aggressiveness present limitations. This study shows significant implications for shareholders, regulators and researchers. As a matter of fact, shareholders will observe the effect of appointing a foreign CEO on the tax aggressiveness level. This study may also provide regulators with new ideas regarding the role of the CEO and its impact on aggressive decision-making. And it brings forth new insight for researchers through adding a foreign CEO as a new determinant of tax aggressiveness. Originality/value According to the authors’ knowledge, this study is the first to provide empirical evidence regarding the effect of both CEO compensation and CEO attributes on tax aggressiveness. It also looks into the impact of a foreign CEO on tax aggressiveness.

Market orientation and firm performance: can there be too much of a good thing?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vivien Jancenelle ◽  
Susan F. Storrud-Barnes ◽  
Dominic Buccieri
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Past Research ◽  
Good Thing ◽  
Annual Reports ◽  
Curvilinear Relationship ◽  
Computer Assisted ◽  
Content Type ◽  
Trade Offs ◽  
Linear Relationships

PurposePast research has generally purported that market orientation (MO) leads to superior firm performance, despite emerging evidence suggesting that the highest levels of MO are not always rewarded. Drawing on resource-based view and MO literature, the authors posit that too much MO may be as detrimental as too little for firms seeking to achieve better performance, and that moderate MO capabilities may be the most beneficial. Furthermore, the authors propose and test for organizational confidence as a first potential moderator of the MO-performance inverted U-shaped link.Design/methodology/approachThe authors use Computer-Assisted-Text-Analysis (CATA) methodology assess constructs from annual reports matched with a 5-year longitudinal dataset of 2,245 firm-year observations drawn from the S&P 500.FindingsThe results not only support the presence of an inverted U-shaped link between MO and firm performance, but also identify organizational confidence as an important moderator of this newly uncovered curvilinear relationship.Practical implicationsWhen it comes to the effect of MO on firm performance, there can be indeed be “too much of a good thing,” and managers should be aware of the trade-offs that come attached with overcommitting to a MO strategy.Originality/valueThe authors contribute to extant research on the MO–performance link by moving beyond simple linear relationships and identifying an inverted U-shaped relationship between MO and firm performance. This newly found curvilinear relationship may explain and reconcile prior contradicting findings on the benefits of MO. Organizational confidence is also found to trigger a shape-flip of the MO–performance link, thereby suggesting a new boundary condition.

Strategic groups and local railway development in China

2020 ◽  
Vol 9 (3) ◽  
pp. 363-374
Author(s):  
Karl Yan
Keyword(s):  
Strategic Groups ◽  
Structured Interviews ◽  
Party Leadership ◽  
Strategic Group ◽  
Content Type ◽  
Government Documents ◽  
Principal Finding ◽  
Archival Work ◽  
Moral Persuasion ◽  
Municipal Level

PurposeWhat are the mechanisms through which Chinese municipal leaders overcome implementation breakdown? This study, through process tracing, archival work and semi-structured interviews, examines the implementation of three sub-municipal-level railway projects involving the same principals and agents over the same period of time.Design/methodology/approachThe analysis was guided by the hypothesis that political coordination and the exercise of political and Party leadership played an indispensable role in the two cases of successful policy implementation, and its absence accounts for the case of implementation breakdown.FindingsThe principal finding is that an informal “strategic group” was created to “herd” cadres to overcome the problem of implementation. Herding here refers to the idea that Party leadership, through the use of moral persuasion, encourages cadres moving towards a desired common goal and direction.Research limitations/implicationsThis study is limited in the number of secondary resources (government documents and government and media releases) available to the field interviewees, which the author heavily relied on to complete the study.Originality/valueBuilding on the conceptual work of “strategic groups” by Thomas Heberer, Anna Ahlers, and Gunter Schubert, this study makes an empirical contribution by tracing the process through which an informal strategic group exercises its power to overcome implementation breakdown.

Product market competition, state-ownership, corporate governance and firm performance

2018 ◽  
Vol 26 (1) ◽  
pp. 62-83 ◽  
Author(s):  
Li Liu ◽  
Wen Qu ◽  
Janto Haman
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Market Competition ◽  
State Ownership ◽  
Product Market Competition ◽  
Content Type ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
Negative Effect

Purpose The purpose of this paper is to examine the association between firm performance and product market competition (PMC), and then examine the mitigation effect of corporate governance and/or state-ownership (SOEs) in the association between PMC and firm performance using Chinese listed firms. Design/methodology/approach The authors consider three determinants of the PMC that affect the nature of competition, and use market concentration, product substitutability and market size as proxies for PMC. The authors construct a corporate governance index which measures the extent of board independence, monitoring strength of supervisory board over board of directors, and monitoring strength of board of directors over CEO. The authors use Tobin’s Q as a proxy for firm performance. The authors use a sample of 20,706 firm-year observations listed on the Chinese stock market between 2001 and 2016 to empirically investigate the research questions proposed in the paper. Findings The authors find that higher PMC is associated with lower firm performance. The authors find that good corporate governance practices moderate the negative effect of higher PMC on firm performance. The association between higher PMC and lower performance is weaker for firms controlled by SOEs compared to non-SOEs. Further, the moderation effect of SOEs on the association between higher PMC and lower performance is more pronounced for firms with good corporate governance practices compared to firms with weak corporate governance practices. Originality/value Extant studies investigating the relationship between PMC and corporate governance suggest an either complementary or substitution relationship in developed economies. Our study highlights the interactive role played by SOEs and good corporate governance practices in firm performance in highly competitive product markets in an emerging economy. The findings provide insightful information to regulators of other emerging countries that SOEs with good corporate governance practices can play an important role in the economy by mitigating the negative effect of higher PMC on firm performance.

The effects of intangible assets on firm performance

2019 ◽  
Vol 34 (3/4) ◽  
pp. 148-168
Author(s):  
Jannatul Ferdaous ◽  
Mohammad Mizanur Rahman
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Intangible Assets ◽  
Balance Sheet ◽  
Poor Performance ◽  
Significant Rise ◽  
Annual Reports ◽  
Content Type ◽  
Track Record ◽  
Effect Estimation

Purpose Using the resource-based view and knowledge-based view as theoretical backdrop, the purpose of this paper is to explore the relationship between intangible assets and firm performance. Design/methodology/approach The firms’ audited annual reports were collected during the period of 2007–2017 from 49 listed manufacturing firms of four industries in DSE, Bangladesh. This inductive research uses panel data (fixed-effect) estimation technique for balanced panel data to measure, describe, and analyze the firm performance. Findings After controlling some specific variables, the results reveal mixed behavioral effects of intangible assets on firm performance. Even if intangible assets trigger a significant rise in the firms’ EPS (a measure of financial performance), the firms cannot maximize shareholders’ wealth due to their poor performance in the stock market of Bangladesh. Practical implications The proposed models could be important tools for managers to integrate intangible assets in their decision process. The proposed models could also be important tools for investors to select their portfolios that have a track record for continuous investment in intangible assets in an efficient and sustainable way. Originality/value Intangible assets are largely absent from the firms’ balance sheet. Consequently, previous empirical research works struggled to measure and quantify the effects of intangible assets on firm performance. The study fills that gap in the understanding of intangible assets’ nature, measurement method, and their effects on firm performance.

Determinants of interest rate in emerging markets

2018 ◽  
Vol 14 (3) ◽  
pp. 267-290 ◽  
Author(s):  
Sulait Tumwine ◽  
Samuel Sejjaaka ◽  
Edward Bbaale ◽  
Nixon Kamukama
Keyword(s):  
Interest Rate ◽  
Emerging Markets ◽  
Emerging Market ◽  
Equity Capital ◽  
Annual Reports ◽  
Data Set ◽  
Reserve Requirement ◽  
Content Type ◽  
Net Interest Margin ◽  
Negative Effect

Purpose The purpose of this paper is to investigate the determinants of interest rate in emerging markets, focusing on banking financial institutions in Uganda. Design/methodology/approach Using the net interest margin model, interest rate was estimated by applying a panel random effects regression method on 24 banks, while controlling for bank-specific factors, industry and macroeconomic indicators. Data were drawn from annual reports provided by Bank of Uganda Depository Corporation survey from 2008 to 2016. Findings The results indicate that liquidity, equity capital, market power and reserve requirement have a positive effect on interest rate. The study further finds that operational efficiency, lending out ratio, concentration, public sector borrowing and private sector credit have a negative effect on interest rate. However, credit risk does not influence interest rate. Research limitations/implications Studied banks are grouped in one panel data set; future studies would focus on the differences in banks and establish how these differences affect interest rate. Future study would also focus on how the determinants of interest rate in Uganda are compared with those of other banks in other emerging market countries. Practical implications Bank managers need to take interest in equity mobilization because it is a reliable and cheaper source of funding bank operations. Banks should emphasize efficient operations to reduce on the cost of doing business. Government should utilize funds borrowed from banks in efficient ways to improve economic growth. The central bank should minimize the use of reserve requirement as a means of controlling money in circulation. Originality/value This is the first paper that uses annual report data from several banks and periods to investigate the determinants of interest rate in an emerging country.

How manufacturer brand erosion shapes consumer assortment perceptions

2019 ◽  
Vol 32 (4) ◽  
pp. 922-939 ◽  
Author(s):  
Chunyu Li ◽  
Yongfu He ◽  
Ling Peng ◽  
Denghua Yuan
Keyword(s):  
Empirical Work ◽  
Store Brands ◽  
Negative Effects ◽  
Strategic Positioning ◽  
Content Type ◽  
Negative Effect ◽  
Manufacturer Brand ◽  
Private Brand ◽  
Subject Experiment ◽  
Practical Implications

Purpose Recently, the popularity of store brands has resulted in some manufacturer brands being removed from shelves. The current literature lacks empirical work on the effect of manufacturer brand erosion on consumer assortment perception and repatronage intention. Based on signalling theory, the purpose of this paper is to manufacturer brands play a signalling role and contend that manufacturer brand erosion has detrimental effects on the assortment perception due to reduced signalling efficacy. Design/methodology/approach A 3 (low manufacturer brand erosion vs high manufacturer brand erosion vs manufacturer brand dominance) ×2 (assortment size: small vs large) between-subject experiment was conducted. Findings Manufacturer brand erosion exerts a negative effect on assortment attractiveness and consumers’ repatronage intention; the greater the erosion, the larger the negative effect. These negative effects are mediated by reduced consumer perceptions of assortment quality and variety. A large (vs small) assortment size attenuates the negative effect of manufacturer brand erosion by improving perceived assortment quality. Practical implications To engage in strategic positioning through efficient assortment management, retailers should cooperate with brand manufacturers, instead of promoting their own private labels. Nevertheless, a large assortment dominated by store brands signals that the retailer has built a strong private brand, which in turn gains a differentiation advantage. Originality/value This paper is among the first to take the signalling perspective and explicitly investigate whether and how manufacturer brand erosion exerts a significant impact on assortment perception.

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