Why pure strategies may be wrong for transition economy firms

George A. Shinkle, Aldas P. Kriauciunas and Greg Hundley

Strategic Management Journal, 2013, vol. 34, issue 10, 1244-1254

Abstract: The strategy purity hypothesis argues firms will have better results pursuing a single, business‐level strategy of either cost leadership or differentiation rather than a mix of both. Since this claim implicitly assumes a developed‐economy context, we examine the efficacy of business strategies in transition economies. We find the benefits of a pure strategy are diminished when the institutional environment has a low degree of market orientation but are increased when the institutional environment is more market oriented. Our results indicate a boundary condition for the strategy purity hypothesis and support arguments for an institution‐based view of business strategy. Copyright © 2013 John Wiley & Sons, Ltd.

Date: 2013
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