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Strategic clarity, business strategy and performance

Strategic clarity, business strategy and performance Purpose – This paper seeks to investigate the link between business strategy and performance, giving special attention to the composition of combination strategies. Design/methodology/approach – A survey assessing business strategy and performance was completed by managers representing 277 retail businesses in the USA. Findings – The combination strategy was associated with higher performance in some but not all instances. Strategic clarity – the extent to which a single strategy reflects the organization's strategic intent – was also associated with organizational performance. Businesses with high and low strategic clarity outperformed those with moderate strategic clarity. Research limitations/implications – This paper investigated US retailers and did not assess businesses in other industries or countries. Future research that seeks to replicate these findings is warranted. Practical implications – Businesses can pursue either a single generic strategy (i.e. low cost or differentiation, prospector or defender or analyzer, etc.) or attempt to combine two or more strategies. Porter and others have warned that a combination strategy is suboptimal because of trade‐offs inherent in “pure” strategies. While some businesses have pursued a combination strategy and performed poorly, others have done so with great success. Evidence presented in the paper attempts to resolve this conundrum, suggesting that high‐performing businesses either concentrate on a single strategy along the Miles and Snow typology or combine all three equally. Those attempting intermediate combinations are more likely to perform poorly. Originality/value – The paper proposes the notion of strategic clarity and provides evidence that supports a U‐shaped link between strategic clarity and business performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Strategy and Management Emerald Publishing

Strategic clarity, business strategy and performance

Journal of Strategy and Management , Volume 3 (4): 21 – Oct 26, 2010

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1755-425X
DOI
10.1108/17554251011092683
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper seeks to investigate the link between business strategy and performance, giving special attention to the composition of combination strategies. Design/methodology/approach – A survey assessing business strategy and performance was completed by managers representing 277 retail businesses in the USA. Findings – The combination strategy was associated with higher performance in some but not all instances. Strategic clarity – the extent to which a single strategy reflects the organization's strategic intent – was also associated with organizational performance. Businesses with high and low strategic clarity outperformed those with moderate strategic clarity. Research limitations/implications – This paper investigated US retailers and did not assess businesses in other industries or countries. Future research that seeks to replicate these findings is warranted. Practical implications – Businesses can pursue either a single generic strategy (i.e. low cost or differentiation, prospector or defender or analyzer, etc.) or attempt to combine two or more strategies. Porter and others have warned that a combination strategy is suboptimal because of trade‐offs inherent in “pure” strategies. While some businesses have pursued a combination strategy and performed poorly, others have done so with great success. Evidence presented in the paper attempts to resolve this conundrum, suggesting that high‐performing businesses either concentrate on a single strategy along the Miles and Snow typology or combine all three equally. Those attempting intermediate combinations are more likely to perform poorly. Originality/value – The paper proposes the notion of strategic clarity and provides evidence that supports a U‐shaped link between strategic clarity and business performance.

Journal

Journal of Strategy and ManagementEmerald Publishing

Published: Oct 26, 2010

Keywords: Management strategy; Retail trade; Strategic groups; Corporate strategy

References