Generic Strategy
British Journal of Management, Vol. 21, 1027–1043 (2010) DOI: 10.1111/j.1467-8551.2008.00626.x
A Study of the Role Played by Manufacturing Strategic Objectives and Capabilities in Understanding the Relationship between Porter’s Generic Strategies and Business Performance
´ ´ ´ Javier Gonzalez-Benito and Isabel Suarez-Gonzalez
´ Dpto. Administracion y Economı´ a de la Empresa, Universidad de Salamanca, Campus Miguel de Unamuno, Edificio FES, 37007 Salamanca, Spain Corresponding author email: javiergb@usal.es
An appropriate alignment between business strategy, manufacturing strategic objectives and manufacturing capabilities reportedly influences business performance positively. However, few papers empirically analyse this proposition for the case of Porter’s generic strategies of cost leadership and differentiation, and none jointly considers all four elements. This paper integrates strategies, capabilities and performance in a single model and proposes that both manufacturing competitive priorities and capabilities, articulated in terms of cost and flexibility, are essential for explaining the link between generic business strategies and business commercial and financial performance. Within this analytic framework, we test whether companies that emphasize one business strategy rather than another achieve a better alignment and superior performance. The analyses conducted with a sample of 148 Spanish manufacturers provide general support for these propositions and contribute to a deeper understanding of the role played by functional strategies in understanding the outcomes of business strategy.
Introduction
The relationship between business strategy and business performance represents a central question in strategic management (Porter, 1980) and has given rise to copious research (CampbellHunt, 2000). However, little empirical research has focused on how business strategy should be
The authors gratefully acknowledge the financial support of the Spanish Ministry
A Study of the Role Played by Manufacturing Strategic Objectives and Capabilities in Understanding the Relationship between Porter’s Generic Strategies and Business Performance
´ ´ ´ Javier Gonzalez-Benito and Isabel Suarez-Gonzalez
´ Dpto. Administracion y Economı´ a de la Empresa, Universidad de Salamanca, Campus Miguel de Unamuno, Edificio FES, 37007 Salamanca, Spain Corresponding author email: javiergb@usal.es
An appropriate alignment between business strategy, manufacturing strategic objectives and manufacturing capabilities reportedly influences business performance positively. However, few papers empirically analyse this proposition for the case of Porter’s generic strategies of cost leadership and differentiation, and none jointly considers all four elements. This paper integrates strategies, capabilities and performance in a single model and proposes that both manufacturing competitive priorities and capabilities, articulated in terms of cost and flexibility, are essential for explaining the link between generic business strategies and business commercial and financial performance. Within this analytic framework, we test whether companies that emphasize one business strategy rather than another achieve a better alignment and superior performance. The analyses conducted with a sample of 148 Spanish manufacturers provide general support for these propositions and contribute to a deeper understanding of the role played by functional strategies in understanding the outcomes of business strategy.
Introduction
The relationship between business strategy and business performance represents a central question in strategic management (Porter, 1980) and has given rise to copious research (CampbellHunt, 2000). However, little empirical research has focused on how business strategy should be
The authors gratefully acknowledge the financial support of the Spanish Ministry