Impact Of Manufacturing Enterprise Competitive Strategy On Performance

Research on the relationship between competitive strategy and corporateperformance is always an important issue in the field of strategic management. Sincethe1980s, Western scholars have researched a lot on the relationship betweencompetitive strategy and firm performance, and formed a set of application theory.However, since the industrialization process of China is latter than Western countries,with domestic enterprises operating environment, such as property protection boxsystem, is much worse; the conclusions based on the foreign enterprises might notapply to Chinese enterprises. As the domestic direct research on the relationshipbetween competitive strategy and performance is very rare, this paper will summarizethe research methods of the Western scholars, choose Chinese manufacturing industrylisted corporate as research sample, then explore the mechanism of competitiv estrategy to performance and the moderating effects of environmental features oncompetitive strategy-performance relationship empirically.Firstly, we collect and sort empirical literatures about strategy-performancerelationship, and put forward research hypothesis after reviewing competitive strategytheory, resource allocation theory, contingency theory and performance evaluationtheory. Then, selecting Chinese manufacturing enterprises’ financial data for depictingstrategies, we divide several strategic types of manufacturing enterprises in the basis ofstrategic score, compare and analyze enterprises performance differences betweendifferent types of competitive strategy. Furthermore, we run a balanced panel data inthe STATA11.0, using multiple regression method to test competitive strategy’s directinfluence on performance and compare the difference. Finally, we depict marketenvironment through statistical treatment of enterprises operating income data, andverify the moderating effects of environment characteristics such as dynamic andcompetitive on the strategy-performance relationship.After such exploring and testing processes, following conclusions are reached:(1)There are four types of competitive strategies in Chinese manufacturing enterprises,namely combination strategy, pure strategy and―stuck in the middle‖strategy, and theperformance level varies significantly between competitive strategy types,combination strategy which can achieve cost advantage and differentiation advantag esimultaneously leads to superior performance, pure competitive strategy which pursuit a single advantage such as cost or differentiation gets a normal performance,―stuck inthe middle‖strategy owns no advantage and experiences poor performance.(2)Theempirical test results of competitive strategy to performance show that both Low coststrategy and Differentiation strategy have a significant positive effect on corporateshort-term financial performance, Differentiation strategy’s positive impact oncorporate financial performance enhanced gradually. There was no difference oflong-term effect on corporate performance between Differentiation strategy and Lowcost strategy. Both competitive strategy play a significant role in promoting marketvalue and this two kinds of competitive strategy gets opposite effect on market share,but the impact of Differentiation on long-term market value is moresignificant.(3)Environmental uncertainty indeed play a significant moderating effecton the relationship between competitive strategy and corporate performance. Thesegmentation empirical results about environmental characteristics influence onstrategy-performance relationship show that, in the primary stage of economictransformation in China, dynamic environment and competitive environment both havenegative impacts on the relationship between Differentiation strategy and financialperformance; in the late stage, environmental dynamics moderates differentiationstrategy-financial performance positively, competitive environment hasnegative/positive effects on the relationship between differentiation/low cost strategyand financial performance; the timing differences of environment moderating effectreflect the special effects of China’s economic transition characteristics in the processof enterprise’s strategic decision.