Strategic alignment and performance of market‐seeking MNCs in China

Yadong Luo and Seung Ho Park

Strategic Management Journal, 2001, vol. 22, issue 2, 141-155

Abstract: This study explores the environment–strategy–performance relation of foreign firms, especially those with a market‐seeking mandate, in China. The results indicate that the Analyzer orientation is best suited to the turbulent Chinese market, which has been undergoing an economic transition in recent years. There is also a significant difference in financial performance among market‐seeking MNCs depending on strategic orientations, with the Analyzer orientation producing the highest performance. The Prospector and the Defender orientations lead to poor financial performance because of the mismatch with China's market, which is highly dynamic and complex. Our findings reiterate the importance of understanding local market traits and opportunities and developing proper strategic configurations for market‐seeking MNC subsidiaries, especially in an emerging economy like China. Copyright © 2001 John Wiley & Sons, Ltd.

Date: 2001
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