Are Strategic Frameworks Still Applicable? Analyzing the Strategy-Performance Relationship in Germany

Abstract

This study examines the strategy-performance relationship within publicly traded German firms. Strategic management literature provides several strategic frameworks that offer guidance on promising strategies. However, due to major changes such as globalization and fundamental differences between the strategic frameworks, managers wonder whether strategic frameworks are still applicable and, if so, which one is the right one. We introduce a new measure of competitive strategy and analyze a sample of 4,364 firm-years among 543 firms between 2006 and 2017. Our results suggest common strategic frameworks such as the approach of Miles and Snow’s (1978) still fits to the corporate landscape in Germany. We find strategies based on efficiency or differentiation as well as combinations of both to be associated with superior performance within the industry. Our results contribute to the discourse on the strategy-performance relationship as our results provide insights into promising strategies that are of interest for researchers and practitioners.