The Impact of Business Strategy on Firm Performance of Listed Firms in Vietnam
Main Article Content
Abstract
This study was conducted to contribute empirical evidence of the impact of Michael Porter’s business strategy on performance in Vietnamese listed firms. Based on data from 620 firms on the Vietnamese stock exchange from 2010 to 2019, we use a quantitative research method to demonstrate the positive association between performance and differentiation strategy. We found cost leadership strategy has no meaning. Based on the results, we make implications for listed firms and regulatory agencies which will contribute to improving firm performance.
Keywords:
Business strategy, cost leadership, differentiation, firm performance, listed firm, Vietnam.
References
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[19] Titman, S. and Wessels, R. (1988), The Determinants of Capital Structure Choice. XLIII(1)
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[22] Asimakopoulos, S. and Karavias, Y., “The impact of government size on economic growth: A threshold analysis”, Economics Letters, 139 (2016), pp. 65-68.
[2] Haxv, A.C and Majluf, N.S. (1996), “The strategy concept and process: A pragmatic approach”, Upper Saddle River, N.J: Prentice Hall
[3] Allen, R.S., Helms, M.M., Takeda, M. and White, C. (2007), “Porter’s Generic Strategies: An Exploratory Study of Their Use in Japan”, Journal of Business Strategies, Vol. 24 No. 1, pp. 69-89
[4] Helms, M. M., Dibrell, C. and Wright, P. (1997), “Competitive strategies and business performance: evidence from the adhesives and sealants industry”, Management Decision, Vol. 35 No. 9, pp. 689-703
[5] Thornhill, S. and White, R. E. 2007, Strategic purity: A Multi-Industry Evaluation of Pure vs. Hybrid Business Strategies. Strat. Mgmt. J., 28: 553-561
[6] Banker, R. D., Mashruwala, R. and Tripathy, A. (2014), “Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?”, Management Decision, Vol. 52 No. 5, pp. 872-896
[7] D’Aveni, R.A. (1994). Hypercompetition: Managing the Dynamics of Strategic Maneuvering. The Free Press.
[8] Hamel, G. (2000), Leading the Revolution, Harvard Business School Press, Boston, MA
[9] Porter, M. E. (1980), Industry Structure and Competitive Strategy: Keys to Profitability. Financial Analysts Journal, Vol. 36 No. 4, pp. 30-41
[10] Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press
[11] Hambrick, D.C. (1983a), “Some tests of the effectiveness and functional attributes of Miles and Snow’s strategic types”, Academy of Management Journal, Vol. 26 No. 1, pp. 5-26
[12] Miller, D. and Friesen, P. H. (1986), Porter’s (1980) Generic Strategies and Performance: An Empirical Examination with American Data: Part II: Performance Implications, Organization Studies, Vol. 7 No. 3, pp. 255-261.
[13] Asdemir, O., Fernando, G. D. and Tripathy, A. (2013), Market perception of firm strategy. Managerial Finance, Vol. 39 No. 2, pp. 90-115
[14] Birjandi, H. (2012), The Effects of Cost Leadership Strategy and Product Differentiation Strategy on the Performance of Firms, Vol. 2 No. 1, pp. 14-23
[15] Balsam, S., Fernando, G. D. and Tripathy, A. (2011), “The impact of firm strategy on performance measures used in executive compensation”, Journal of Business Research, Vol. 64, pp. 187-193
[16] Ilyas, M., Khan, I. and Khan, N. (2018), Cost Leadership Strategy and Financial Performance : Empirical Evidence from Textile Sector Listed Companies of Pakistan. Journal of Business and Tourism, Vol. 4 No. 1, pp. 191-197
[17] Merchant, K.A and Van der Stede, W.A (2007) Management control systems: performance measurement, evaluation and incentives. Prentice Hall, Harlow, UK
[18] Jermias, J. (2008), The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance. British Accounting Review, Vol. 40 No. 1, pp. 71-86
[19] Titman, S. and Wessels, R. (1988), The Determinants of Capital Structure Choice. XLIII(1)
[20] Pi, L. and Timme, G. (1993), Corporate control and bank efficiency *, Vol. 17, pp. 515-530
[21] Yazdanfar, D. (2013). Profitability determinants among micro firms: Evidence from Swedish data. International Journal of Managerial Finance, Vol. 9 No. 2, pp. 151-160.
[22] Asimakopoulos, S. and Karavias, Y., “The impact of government size on economic growth: A threshold analysis”, Economics Letters, 139 (2016), pp. 65-68.