Strategic Commitments And Performance Of China’s Household Appliances Corporations Based On The Perspective Of Business Cycle

Pankaj Ghemawat consides that the determination and implementation of strategic commitment is the only general explanantion for sustainable difference in the performance of companies. The irreversibility of strategic commitment means that companies need to predic the evolvment of the industrial structure and the occurrence of timing accuratly. Therefore, to identify business opportunities and seize the opportunity is not only an inevitable requirement to achieve strategic management, but also an important prerequisite for companies to gain competitive advantage.Based on the companies strategic commitment to investment opportunities as the research object, this paper explore the relationship between the opportunity choices of strategic commitment at different stages of economic cycle and corporate performance, technological innovation leads to fluctuations in the economic cycle.On the basis of Schumpeterian innovation theory, Rostow recognized industry structure change will be reflected by leading industries. The new leading industries of the next long wave cycle to promote overall economic growth, and to maintain high growth. Vanduyn further found that leading industry concentrating in the improvement period and prosperity period of long-wave cycle. Based on Schumpeter’s business cycle theory, leading industry and industry life cycle theory, the study focuses on how companies grasp the best time to enter into the leading industry to gain long-term competitive advantage by identifing business cycle.The research is divided into two parts, identification of business cycle in China and multi-case study:(1) according to Schumpeter’s theory of economic cycles, dividing the period of China’s economy from1992to2012into different Juglar cycles and Kitchin cycles by NBER, and identifying China leading industry change.(2) collecting annual reports, announcements and financical date from the7companies in Chinese household appliance manufacturing industry as cases’text sample,and analyzing the relationship between the timing of strategic commitment modles and performance on the difference stages of business cycles. This paper finds that the companies of high performance obtained financing in the first Kitchin cycle with a Juglar cycle and in the run up of the economic crisis, and, entered into new industries in the first Kitchin cycle and the second Kitchin cycle.they merged and acquised after the economic crisis,reserved for entering new leading industry at next Juglar cycle. The system is an important reason to affect the opportunity choices of the enterprise strategic commitment. MBO plan can constraint the excesses behavior of manage team during the economic boom, and motivate TMT to enhance corporate performance in a recession. TMT can foresee the economic cycle fluctuations, choose strategic commitment flexibility, and obtain long-term competitive advantage.The paper discusses the relationship between companise performance and the ablitiliy of seizing the opportunity of strategic commitment under the businuss cycle view,and combined the micro behavior with macroeconomic cycle by the qualitative data and quantitative data.The conclusion of this article does not apply to monopoly industries and industry that relying on intangible assets and providing customized services.This paper contains seven parts. In the introduction,we introduces the research background,the purpose and Innovations and framework of the paper. In the chapter of commitment and advantage,we review the theory about competitive advantage and explain the origin of the long-term of competitive advantage. In the chapter of business cycle and commitment, according to Schumpeter’s theory of economic cycles, industry leading theory and industry life cycle theory,we explain how and when companies make commitment which leads the companies obtain the long-term competitive advantage. In the chapter of identification of business cycle in China, we found a link between China’s leading industry change and the performance of Chinese household appliance manufacturing companies. In the chapter of the research methods and assumptions, we explain the research methods and put forward hypothesis.In the chapter of case analysis and conclusions and implications, test hypothesis and give relevant explanation.