Generic Strategies and Firm Performance in SMEs: A Longitudinal Study of Austrian SMEs
Project Description
Partner: Austrian Research Centers GmbH
The research project studies the impact of generic strategies on firm performance using a longitudinal study of small and medium-sized firms in Austria. In two surveys, data on the strategic behavior and performance of the same group of firms was gathered for the period from 1992 to 2002 with the particular aim of capturing strategic persistence and its link to performance. Three generic strategies were classified - the cost-efficiency, differentiation, and combination strategies - and their long-term impact on profitability, turnover and employment growth examined. We argue that the combination strategy is a viable strategic choice for SMEs in particular in the competitive environment of a small, open economy such as Austria. Our results reveal that a combination strategy performs better with respect to profitability and growth than no strategy at all and achieves even higher profitability than a differentiation strategy. Moreover, companies which changed their strategy over time were not inferior compared to firms which followed a pure or combination strategy
The research project studies the impact of generic strategies on firm performance using a longitudinal study of small and medium-sized firms in Austria. In two surveys, data on the strategic behavior and performance of the same group of firms was gathered for the period from 1992 to 2002 with the particular aim of capturing strategic persistence and its link to performance. Three generic strategies were classified - the cost-efficiency, differentiation, and combination strategies - and their long-term impact on profitability, turnover and employment growth examined. We argue that the combination strategy is a viable strategic choice for SMEs in particular in the competitive environment of a small, open economy such as Austria. Our results reveal that a combination strategy performs better with respect to profitability and growth than no strategy at all and achieves even higher profitability than a differentiation strategy. Moreover, companies which changed their strategy over time were not inferior compared to firms which followed a pure or combination strategy
