Pure versus hybrid: performance implications of Porter's generic strategies

Competitive strategy, development zone policy and firm growth: Empirical evidence from China

Competitive strategy plays an important role in achieving superior profits, but there is still much to be explored in terms of the effect on firm growth. This study focuses on exploring the relationship between competitive strategy and firm growth in emerging economies. We focus on how the development zone policies moderate this relationship. This study uses a two-way fixed-effect model to analyze data for 527 manufacturing firms listed in China's Shanghai and Shenzhen A-shares from 2012-2021. Our empirical analysis showed that there is a significant positive relationship between low-cost strategy and firm growth and a significant negative relationship between differentiation strategy and firm growth. Compared with national development zones, firms in provincial development zones choose low-cost strategies that are more conducive to growth. Compared with provincial development zones, firms in national development zones choose differentiation strategies that are more conducive to growth. These findings contribute to understanding the mechanisms by which competitive strategy affects firm growth in different regional institutional contexts in emerging economies. The results of the study also have reference value for the government to optimize the development zone policies.

The Moderating Effect of the Social Deprivation Index (SDI) on the Relationship Between Hospital Strategy and Financial Performance

Background: One of the major tenets of contingency theory is that the appropriate fit between strategy and environmental contingencies results in better financial performance. The purpose of this study was to investigate whether the Social Deprivation Index (SDI) moderates the association between hospital strategy and financial performance. Methods: We used longitudinal data from 2011 to 2016 from US urban general acute care hospitals. Four secondary datasets were used: the American Hospital Association (AHA) Annual Survey, Medicare cost reports (CMS), Area Health Resource File (AHRF), and the Robert Graham Center's SDI. A generalized estimating equation (GEE) regression model was used to analyze the data. An interaction term was used to test the moderating effect of the SDI on the strategy-financial performance relationship. Results and Discussion: Our results showed that compared to hybrids, the SDI moderates the relationship between strategy and financial performance for cost leaders and hybrids. Increasing market social deprivation increases the hospital operating margin of cost leaders by 0.06%. Similarly, increasing levels of market social deprivation increases the hospital operating margin of hybrids by 0.06% (p < 0.05). As such, our results suggest that social deprivation may affect the viability of hospital strategy.

Contextual factors and business strategy choice: The case of us hospitals

US hospitals are struggling with how to compete and remain viable in an increasingly turbulent and competitive environment. Using Porter’s generic strategies and resource dependence theory, this study examined the relationship between environmental factors and business strategy choice among U.S. hospitals. The study used longitudinal data from 2006 to 2016 of US urban, general acute care hospitals from the American Hospital Association Annual Survey, Medicare cost reports, and Area Health Resource File. Multinomial regression was used to analyze the data. and Discussion: Our findings showed four types of hospital strategy: cost-leadership, differentiation, hybrid, and stuck-in-the-middle. A greater number of physicians (county-level) increases the likelihood of pursuing differentiation and hybrid strategy. On the other hand, a higher older adult population (65 years+) increases the likelihood of pursuing a cost-leadership strategy. Similarly, lower competition and higher Medicare Advantage penetration increases the likelihood of pursuing cost-leadership over hybrid strategy. An increase in the unemployment rate decreases the likelihood of pursuing differentiation and cost-leadership strategies versus the hybrid strategy. Finally, hospitals pursuing a differentiation strategy tended to be larger, teaching, and not-for-profit. The results showed the importance of environmental and organizational factors in predicting the strategy choice of hospitals.

The Effects of the Strategy and Goal on Business Performance as Mediated by Management Accounting Systems

Previous research in the literature often investigated the associations between management accounting systems and the success of organizations. However, little has been done in regard to the association of business strategies, goals, and firms’ performance while having management accounting tools as mediators. Management accounting systems are classified as traditional and strategic management accounting themes. Each theme, of course, implements different accounting tools. This article explores the degree to which, as mediated by management accounting systems, the business strategies and business goals of large Thai manufacturing companies influence their financial and non-financial performance. To gather the data, a survey questionnaire was developed. Of the 1500 companies selected for inclusion in the survey, 205 provided completed and usable responses for a response rate of 13.67%. Structural equation modeling (SEM) was used to analyze the relationships among the variables. The findings shed some light on what the management of a firm could expect concerning organizational performance from their business strategies, business goals, and the implementation of specific management accounting systems. Corporate strategies and corporate goals had a statistical influence on both the financial and non-financial performance of the large corporations in Thailand when mediated via strategic management accounting systems, while there was no influence when mediated by traditional management accounting systems. A greater understanding of the relationships and effects of which mediators should have been employed in organizations to bring forth business strategies and business goals and generate productive results for organizational performance is provided by this research. Choosing the appropriate performance mediators can help achieve corporate strategies and goals.

Strategic management in local hospital markets: service duplication or service differentiation

Background

The purpose of this study is to assess the influences of market structure on hospitals’ strategic decision to duplicate or differentiate services and to assess the relationship of duplication and differentiation to hospital performance. This study is different from previous research because it examines how a hospital decides which services to be duplicated or differentiated in a dyadic relationship embedded in a complex competitive network.

Methods

We use Linear Structural Equations (LISREL) to simultaneously estimate the relationships among market structure, duplicated and differentiated services, and performance. All non-federal, general acute hospitals in urban counties in the United States with more than one hospital are included in the sample (n = 1726). Forty-two high-tech services are selected for the study. Data are compiled from the American Hospital Association Annual Survey of Hospitals, Area Resource File, and CMS cost report files. State data from HealthLeaders-InterStudy for 2015 are also used.

Results

The findings provide support that hospitals duplicate and differentiate services relative to rivals in a local market. Size asymmetry between hospitals is related to both service duplication (negatively) and service differentiation (positively). With greater size asymmetry, a hospital utilizes its valuable resources for its own advantage to thwart competition from rivals by differentiating more high-tech services and reducing service duplication. Geographic distance is positively related to service duplication, with duplication increasing as distance between hospitals increases. Market competition is associated with lower service duplication. Both service differentiation and service duplication are associated with lower market share, higher costs, and lower profits.

Conclusions

The findings underscore the role of market structure as a check and balance on the provision of high-tech services. Hospital management should consider cutting back some services that are oversupplied and/or unprofitable and analyze the supply and demand in the market to avoid overdoing both service duplication and service differentiation.

In a niche of time: do specialty hospitals outperform general services hospitals?

Niche hospitals represent a growing segment in the health care industry. Niche facilities are primarily engaged in the treatment of cardiac or orthopedic conditions. The effectiveness of this strategy is of interest because niche hospitals focus on only the most profitable services. The purpose of this research was to assess the financial effectiveness of the niche strategy. We theorize that firm and market-level factors concomitantly with the strategy of the hospital-niche versus traditional-are associated with financial performance. This research used 2 data sources, the 2003 Medicare Cost Report and the 2003 Area Resource File. The sample was limited to only for-profit, urban, nongovernmental hospitals (n = 995). The data were analyzed using hierarchical least squares regression. Financial performance was operationalized using the hospital's return on assets. The principal finding of this project is that niche hospitals had significantly higher performance than traditional facilities. From the organizational perspective, the niche strategy leads to better financial performance. From a societal perspective, the niche strategy provides increased focus and efficiencies through repetition. Despite the limited focus of this strategy, patients who can access these providers may experience better outcomes than patients in more traditional hospitals.

A configurational view of executive selection behaviours: a taxonomy of USA acute care hospitals

Health-care organizations, particularly hospitals, are among the most complex organizations to manage. However, the executive selection processes these organizations have in place are poorly understood. The purpose of this study is to explore the executive selection processes employed by USA acute care hospitals and discern if such processes are related to environmental, structural and strategic organizational characteristics. We conceptualize this model using a configurational approach. We present an empirically derived taxonomy of hospitals based on executive selection processes, structural and environmental characteristics, and organizational strategy based on the Porter framework. Based on the analyses, three types of hospitals are identified: (1) small, rural, cost leaders with limited selection processes; (2) large, urban, differentiators, with a plan; and (3) small, rural, caught in the middle muddlers.

Application of Porter's Generic Strategies in Ambulatory Health Care

A number of typologies have been developed in the strategic management literature to categorize strategies that an organization can pursue at the business level. Extensive research has established Porter's generic strategies of (1) cost leadership, (2) differentiation, (3) differentiation focus, (4) cost focus, and (5) stuck-in-the-middle as the dominant paradigm in the literature. The purpose of the current study was to research competitive strategies in the Israeli ambulatory health care system, by comparing managerial perceptions of present and ideal business strategies in two Israeli sick funds. We developed a unique research tool, which reliably examines the gap between the present and ideal status managerial views. We found a relation between the business strategy and performance measures, thus strengthening Porter's original theory about the nonviability of the stuck-in-the-middle strategy, and suggesting the applicability Porter's generic strategies to not-for-profit institutes in an ambulatory health care system.

Strategies and performance in hospitals

Today, more than ever in the past, the variables within the health care environment (demand, costs, system deregulation) are undergoing such rapid change that hospital administrators are finding it necessary to develop and implement competitive strategies in order to survive in the increasingly competitive hospital environment. The primary aim of this paper is to answer the following question: Is it possible to transfer strategic management research from other sectors into the hospital industry? The first objective was to identify strategies in hospital management. A questionnaire was designed and sent to hospital CEOs and the data extracted were used to construct the variables needed to identify strategies and perform the subsequent analyses. The second aim was to try to identify groups of organizations using similar strategies and, finally, analyse the impact of these on hospital performance.

An examination of the relationship between strategic group membership and hospital performance

Membership in a particular strategic group, where a strategic group can be defined as groups of firms in an industry following similar competitive approaches and having similar market positions, defines the essentials of a firm's strategy. This study longitudinally examines the relationship between strategic group membership and performance in the hospital industry.

Performance implications of Porter's generic strategies in Slovak hospitals

The aim of the study was to examine the use of Porter's generic strategies and their effect on performance in the context of the Slovak hospital industry. Using mail survey the study first identified the natural taxonomy of four strategic types of Slovak hospitals, based on their use of Porter's generic strategies in pure form and in combination. Next the study examined whether different strategic types were associated with different levels of organisational performance, while controlling for such variables as size and location, which have been argued to influence the hospital performance. The findings indicate that hospitals which follow a "stuck-in-the-middle" strategy, in general, have superior performance on all used performance measures, while hospitals that place only low emphasis on cost leadership, differentiation and focus, labelled "wait and see" in this study, perform the poorest. The study concludes that the research provided body of knowledge relevant for the Slovak hospital industry, that may be used by hospital managers in the strategy formulation process as well as by the researches in exploring the influence of different contingencies on hospitals' strategic orientation.

Key steps in the strategic analysis of a dental practice

As dentistry is becoming increasingly competitive, dentists must focus more on strategic analysis. This paper lays out seven initial steps that are the foundation of strategic analysis. It introduces and describes the use of service-customer matrices and location-proximity maps as tools in competitive positioning. The paper also contains a brief overview of the role of differentiation and cost-control in determining key success factors for dental practices.