What generic strategies do private fitness centres implement and what are their impacts on financial performance?

2020 ◽  
Vol 10 (3) ◽  
pp. 317-333
Author(s):  
Elsa Vieira ◽  
João Ferreira
Keyword(s):  
Financial Performance ◽  
Return On Assets ◽  
Content Type ◽  
Cost Leadership ◽  
Leadership Strategy ◽  
Industry Leadership ◽  
Combined Strategy ◽  
The Cost ◽  
Generic Strategies ◽  
Cost Leadership Strategy

PurposeThe purpose of this paper is to identify the strategies that private fitness centres implement and to evaluate their impact on financial performance.Design/methodology/approachBased upon a sample of 151 private fitness centres in Portugal, multivariate statistics report the implemented strategies and their effect on financial performance. We applied exploratory factorial analysis as our methodology to identify the types of strategy and the ANOVA in order to verify if there are differences of financial performance in the strategies.FindingsThe results obtained demonstrate how private fitness centres implement different strategies, including: cost leadership, differentiation, focus, quality of service, combined and stuck in the middle approaches. The relationship between strategies and financial performance, private fitness centres adopting a cost leadership strategy obtain the best financial performance levels in terms of the sales variable relative to any other strategy but with the combined strategy returning a better performance in terms of the return on assets when compared with the cost leadership strategy.Originality/valueThe originality of this paper stems from its identification of the strategies implemented by private fitness centres, thus, just what type of strategies are in effect across the fitness industry: leadership through cost, differentiation or a focused strategy. However, in addition to ascertaining just which strategies undergo implementation, it is also pertinent in determining just which strategy drives the best financial performance for private fitness centres given that private centres may only remain in the market when achieving financial sustainability. Therefore, this paper seeks to provide information for managers as regards the strategies implemented and their impacts on the financial performance of private fitness centres.

scholarly journals Generic Strategies and sustainability of Financial Performance of Nepalese Enterprises

Pravaha ◽  
2018 ◽  
Vol 24 (1) ◽  
pp. 39-49 ◽  
Author(s):  
Dhundi Bhattarai
Keyword(s):  
Factor Analysis ◽  
Financial Performance ◽  
Fiscal Year ◽  
Return On Assets ◽  
Cost Leadership ◽  
Book Value ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
Administrative Expenses ◽  
Cost Leadership Strategy

The purpose of this paper is to examine the relationship between firm strategy and sustainability of financial performance of Nepalese Enterprises. The research design adopted in this study consists of descriptive and causal-comparative research designs to deal with the various issues raised in this study. Secondary data has been used for this study which was collected from annual audit report of concerned organization of manufacturing and hotel industrities from fiscal year 2000/01 to 2014/15. Factor analysis, descriptive statistics, correlation analysis, and regression analysis are different statistical tool that has been used for this study. Cost leadership and differentiation strategies has been constructed from selling, general, and administrative expenses divided by sales; sales divided by cost of goods sold; capital expenditure on property, plant, and equipment divided by sales, and net book value of plant and equipment; divided by sales variables through factor analysis. By regressing return on assets of future period against on return on assets, interaction of cost leadership strategy with return on assets, interaction of differentiation strategy with return on assets variables. The analysis shows that the enterprises adopting higher selling, general and administrative expenses in association with higher gross profit margin are pursuing differentiation strategy whereas, higher investment on property, plant and equipment along with their existing higher book value of plant and equipment indicates that they are following cost leadership strategy. When organization is following cost leadership and differentiation strategy both positive effect on sustainability of financial performance of Nepalese enterprises. Out of cost leadership and differentiation strategy, cost leadership is better than differentiation strategy to increase financial performance of Nepalese enterprises. Pravaha Vol. 24, No. 1, 2018, page: 39-49

Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?

2014 ◽  
Vol 52 (5) ◽  
pp. 872-896 ◽  
Author(s):  
Rajiv D. Banker ◽  
Raj Mashruwala ◽  
Arindam Tripathy
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Positive Impact ◽  
Strategic Positioning ◽  
Content Type ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
Trade Offs ◽  
Cost Leadership Strategy

Purpose – The purpose of this paper is to investigate the relationship between the strategic positioning of firms and the sustainability of firm performance. The paper argues that pursuing a differentiation strategy leads to more sustainable financial performance compared to following a cost leadership strategy. However, a differentiation strategy may also be associated with greater risk. Design/methodology/approach – To investigate the research questions, the authors utilize publicly available archival data consisting of 12,849 firm-year observations for the period 1989-2003. In the first stage of the analysis, factor analysis is used to determine firms’ strategic positioning. The resulting factor scores are subsequently used in regression analysis to investigate the sustainability of performance based on the strategic positioning of firms. Findings – The results indicate that both cost leadership and differentiation strategies have a positive impact on contemporaneous performance. However, the differentiation strategy allows a firm to sustain its current performance in the future to a greater extent than a cost leadership strategy. The differentiation strategy, though, is also associated with greater systematic risk and more unstable performance. Originality/value – Sustainability of performance refers to how much a firm's current profitability can be sustained in future periods. The main contribution of this study is the comparison of generic strategies based on the sustainability of firm performance. This aspect of the strategy-performance link has not been considered in prior work. Another contribution of the study is that it considers multiple dimensions of firm performance in order to evaluate the trade-offs involved with pursuing different strategies. In particular, the authors contribute to the literature by documenting that while differentiation leads to more sustainable earnings, it also leads to riskier and more unstable earnings.

scholarly journals PENGARUH PEMILIHAN STRATEGI DEFERENSIASI TERHADAP KINERJA KEUANGAN1 (Studi Empiris Pada Perusahaan Manufaktur Food & Beverages terdaftar di BEI)

2017 ◽  
Vol 20 (1) ◽  
pp. 104
Author(s):  
Antonius Singgih Setiawan
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Manufacturing Companies ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
The Cost ◽  
Cost Leadership Strategy

Penelitian ini bertujuan menguji apakah strategi deferensiasi akan memberikan kinerja keuangan yang lebih baik dari pada strategi cost leadership. Menggunakan 85 sampel pengamatan dari 17 perusahaan manufaktur Food & Beverages terdaftar di BEI 2009–2013, hipotesis penelitian diuji menggunakan analisis regreasi. Hasil penelitian menunjukkan bahwa perusahaan yang memilih strategi defensiasi akan menghasilkan kinerja keuangan yang lebih baik dari pada perusahaan yang menerapkan strategi cost leadership.This study aims to test whether differentiation strategy will deliver a better financial performance than cost leadership strategy. Using a sample of 85 observations of 17 Food & Beverages manufacturing companies listed on the Indonesian Stock Exchange from 2009 to 2013, research hypotheses are tested using regresion analysis. The result shows that companies that choose differentiation strategy will produce better financial performance than companies that implement the cost leadership strategy.

FATMOLS lodges of Zambia: reaching international travelers

2017 ◽  
Vol 7 (1) ◽  
pp. 1-18
Author(s):  
Marlene M. Reed ◽  
Steven Sikobela
Keyword(s):  
Customer Service ◽  
Low Cost ◽  
First Century ◽  
Content Type ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Original Intention ◽  
Leadership Strategy ◽  
General Business ◽  
Cost Leadership Strategy

Study level/applicabilityUndergraduate.Case overviewThis case deals with a Zambian entrepreneur named Frank Ngambi who had developed several lodges in Ndola and Lusaka, Zambia. His original intention had been to build lodges that would provide inexpensive lodging for domestic travelers. That strategy had succeeded, and the lodges had been so successful that Frank had been able to increase the size of his lodges in both cities. However, by the summer of 2015, Frank had decided to seek the patronage of international travelers. He knew that this change in strategy would be difficult to achieve. After analyzing one of his competitors, the Intercontinental Hotel in Lusaka, he realized that he needed to increase his product offerings and also offer outstanding customer service. One problem in attaining that goal was the fact that there was very little training for human resources involved in the hospitality industry in Ndola where two of his lodges were located. Another problem he faced was figuring out how to market his lodges to international travelers, as he had never sought that segment of the market before.Expected learning outcomesAt the conclusion of the case discussion, the student should be able to apply Michael Porter’s General Business-Level Strategy to the present and anticipated strategies for the FATMOLS Lodges; to identify tactics that would apply to a low cost leadership strategy; to identify tactics that would apply to a differentiation strategy; to discuss reasons tourism has increased in Zambia in the twenty-first century; to analyze the financial strategy used in developing the FATMOLS Lodges; and to develop a plan for moving a company from a low-cost leadership strategy to one of differentiation.Supplementary materialsTeaching notes are available for educators only. Please contact your library to gain login details or [email protected] request teaching notes.Subject codeCSS 11: Strategy.

scholarly journals The Impact of Cost Leadership Strategy and Financial Management Control Systems on Organizational Performance in Pakistan’s Services Sector

2017 ◽  
Vol 6 (1) ◽  
pp. 1-19
Author(s):  
Ahmed Imran Hunjra ◽  
Farida Faisal ◽  
Faiza Gulshion
Keyword(s):  
Financial Performance ◽  
Control Systems ◽  
Financial Management ◽  
Management Control ◽  
Management Control Systems ◽  
Cost Leadership ◽  
Services Sector ◽  
Leadership Strategy ◽  
The Impact ◽  
Cost Leadership Strategy

This study gauges the impact of cost leadership strategy and financial management controls on financial performance of firms in Pakistan’s services sector. Drawing on a sample of banking, insurance and investment firms listed on the Karachi Stock Exchange, we find that cost leadership strategy and financial management control systems have a significant and positive impact on financial performance. This implies that both factors should be aligned in the long term.

scholarly journals Generic Strategies and Performance of Pharmaceutical Manufacturing Companies in Nairobi County, Kenya

2021 ◽  
Vol 3 (1) ◽  
pp. 17-35
Author(s):  
Grace Wanjiru Ngugi ◽  
Esther Gitonga
Keyword(s):  
Pharmaceutical Manufacturing ◽  
Manufacturing Companies ◽  
Differentiation Strategy ◽  
Pharmaceutical Firms ◽  
Leadership Strategy ◽  
And Performance ◽  
The Cost ◽  
Focus Strategy ◽  
Generic Strategies ◽  
Cost Leadership Strategy

Pharmaceutical industry has been facing a lot of competition both from the inside and outside the country (importers of raw materials who also manufacture finished product). A report by the Kenya Pharmaceutical Sector Profile in 2018 indicated that imports have been rising sharply and grew by more than 30% between 2017 and 2018 in other sectors but a decline from the pharmaceutical manufacturing sector which could be attributed to the low-quality pharmaceutical products. The aim of this study was to analyze the generic strategies and performance of pharmaceutical manufacturing companies in Nairobi County, Kenya. The specific objectives were to: assess the effect of cost leadership strategy, differentiation strategy and focus strategy on performance of pharmaceutical companies in Nairobi County, Kenya. The study was informed by Porter’s Five Forces Model and Resource Based View theory. The study used descriptive research design. The population of this study was all the 22 pharmaceutical manufacturing companies in Nairobi County. The target population was the managers in the pharmaceutical manufacturing companies. The study was a census of all pharmaceutical manufacturing companies in Nairobi. A structured questionnaire was used for data collection. The questionnaire was pilot tested to determine its validity and reliability. The study used primary data which was gathered from the managers. Data collected was organized in spreadsheets for the purpose of analysis. It was coded and entered in Statistical Package for Social Sciences (SPSS, Version 22.0) for analysis. Correlation and regression analysis were conducted to find the relationship between the independent and dependent variables. The study found that cost leadership strategy, product differentiation strategy and focus strategy positively and significantly influenced performance of pharmaceutical companies in Nairobi County, Kenya. The study concluded that managing the production expenses enhances business performance because of increased profit value. Also, the study concluded that using technology to automate business operations lowers the cost thus increasing profitability. In addition to that, the study concluded that providing high quality products to customers builds customer loyalty which translates to improved performance. Similarly, the research concluded that lowering prices relative to that of competitors attracts more customers leading to increased sales volume. It was recommended that pharmaceutical firms should always aim at lowering the cost of production to reap optimal profits. However, these products should meet the quality demands in the market. It was also recommended that businesses should conduct customer satisfaction surveys to bridge the niche that may be identified. This way, businesses will be able to offer the relevant products and services and gain customer loyalty which eventually leads to increased profitability. In addition, it was recommended that non price competition strategies such as product packaging should be adopted by pharmaceutical firms to increase profitability. Customers would prefer to buy uniquely packaged products as they appear appealing. Future areas of study should focus on other competitive strategies since the three generic strategies that were identified did not account for 100% of the variation in performance of pharmaceutical firms.

scholarly journals Competitive Strategy Analysis from Entrepreneurship Stories

2019 ◽  
Author(s):  
Şeyma Gün Eroğlu ◽  
Ayşe İrmiş
Keyword(s):  
Production Process ◽  
Local Market ◽  
Competitive Strategies ◽  
Strategy Analysis ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
The Cost ◽  
Focus Strategy ◽  
Cost Leadership Strategy

Organizations apply two basic competitive strategies in general. These are the cost leadership strategy and the differentiation strategy. The application of any of the mentioned strategies by focusing on a smaller field in the market is called a focus strategy. Companies gain value in the eyes of customer with the strategy they choose. The aim of this study is to analyze the competitive strategies applied by the enterprises and the results of these strategies. A semi-configured interview on the entrepreneurs of two firms which open to a wider market from local market in Denizli with their own brands, was conducted. The first enterprise, which has been maintaining its existence for 80 years and has many branches in the different provinces, is a firm producing sugar and sugar products (Firm A). The second, which has been maintaining its existence for 84 years and has branches in close neighbor cities and provinces, is a firm producing soft drinks (Firm B). The common feature of both firms is that they keep their local characteristics and take their competitive power from the local people. In the research, the competitive strategies of entrepreneurs have been defined and analyzed by benefiting from the entrepreneurship stories that have been brought up to the present day. It was concluded that firm A applied differentiation strategy in the product, production process, and market, while firm B differentiated in the production process without any differentiation in the product and used the focus strategy in the market.

scholarly journals Cost Leadership Strategy and Financial Performance: Empirical Evidence from Textile Sector Listed Companies of Pakistan

2021 ◽  
Vol 4 (1) ◽  
pp. 191-197
Author(s):  
MUHAMMAD ILYAS ◽  
IHTESHAM KHAN ◽  
MUHAMMAD NISAR KHAN
Keyword(s):  
Financial Performance ◽  
Organizational Performance ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Control Variables ◽  
Cost Leadership ◽  
Leadership Strategy ◽  
Cost Leadership Strategy ◽  
Textile Sector

Organizations concentrate to maximize their value. Therefore, their management are interested in their financial performance. However, management is also interested in minimization of the operational cost. This study examines the cost leadership strategy (CLS) and financial performance in a sample of 132 textile sector firms listed on the Pakistan stock exchange (PSX) during 2008-2016. For analyses used panel data random effect model and the results demonstrate that CLS significantly and positively affect the financial performance of textile sector listed firms of Pakistan. Moreover, control variables such as leverage and dividend payout ratio are significantly affect organizational performance. Finally reveals that study supports the theoretical association of return on assets with independent and control variables. Hence, recommended to follow the CLS to reduce operational costs further and to perform efficiently in the competitive market.

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