Business-level strategies and performance in a global industry

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Title: Business-level strategies and performance in a global industry
Author: Kaymak, Turhan
Abstract: Both conventional wisdom and theoretical arguments lend support to the proposition that in global industries multinational enterprises (MNEs ) will outperfor their domestic rivals . According to this position MNEs benefit from economies of scale in production , purchasing , distribution , and R &D , which places them in an advantageous position . Furthermore , they may enjoy lower labor costs , have easier access to capital and engage in cross -subsidization across national markets . But is this really the case ? Extant research has not provided us with an unequivocal answer . This study attempts to address this issue , among others , by looking at the business -level strategies and performance of firms operating in a global industry . The literature review provides the theoretical foundation for the hypotheses . Issues pertaining to industrial organization (10 ) economics and the resource -based view (RBV ) of the firm are presented , which is then followed by a discussion on MNEs , the environment , and business -level strategies . This dissertation utilizes Porter's (1980 ) well -known typology of generic businesslevel strategies while analyzing the competitive actions of both MNEs and domestic firms to uncover the appropriate strategies for these entities . A twenty -seven firm sample from the semiconductor industry is used to test the hypotheses . In contrast to traditional survey type approaches , the generic strategies of low -cost leadership , differentiation , and focus are measured with objective data . Also , due to the small sample size , this study employs nonparametric techniques while tackling the research question . The results provide support for the hypothesis that domestic firms will follow focus low -cost strategies in a global industry . Some of the remaining results are in the right direction but do not reach statistical significance . Of great interest , however , is that no evidence was found for the widely held position that MNEs outperform their domestic rivals in global industries . It seems that domestic firms are holding their own in the semiconductor industry by simply exporting their products , and thus are avoiding the problems associated with having production facilities in more than one nation .
URI: http : / /hdl .handle .net /2346 /12825
Date: 1998-08


Kaymak, Turhan Business-level strategies and performance in a global industry. Doctoral dissertation, Texas Tech University. Available electronically from http : / /hdl .handle .net /2346 /12825 .

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