Strategic Positioning and Company's Long-term Performance
| Authors | |
|---|---|
| Year of publication | 2012 |
| Type | Article in Proceedings |
| Conference | Advances in Finance &Accounting. Proceedings of the 1st WSEAS International Conference on Finance, Accounting and Auditing (FAA ´12) |
| MU Faculty or unit | |
| Citation | |
| Field | Management and administrative |
| Keywords | Strategy; Differentiation; Cost leadership; Performance; Profitability; Assets Turnover; DuPont's decomposition |
| Attached files | |
| Description | The aim of the study is to compare application of the two generic strategies proposed by M.E.Porter. The study draws on ten-year series of data gathered for more than thousand profitable companies residing in the Czech Republic. The return on assets (ROA) is used as the main indicator of financial success of the companies. This indicator is decomposed by means of DuPont's method. The resulting indicators of return on sales (ROS) and assets turnover are used to distinguish between a differentiation strategy and a cost leadership strategy. The results indicate that both strategies are in weak contradiction and that the differentiation strategy represents the better way of attaining sustainable competitive advantage. |