Effective Business Strategy for International Strategic Performance: An Empirical Study of Chinese Construction Firms

Abstract

To build on the research of strategic management we conducted an empirical study in the context of international performance. Three principal strategies, according to Porters generic strategy theory: cost leadership cost-focus and differentiation respectively, were tested in our research model. Quantitative empirical analysis of international strategy on a sample of 58 Chinese firms was conducted to determine strategies that lead to enhanced strategic performance. We utilized survey strategy encompassing questionnaire data collection. The collected data was analyzed using SPSS statistical package. Inference statistics consisting of correlation analysis and multiple regression analysis were performed. Findings of the study suggest that cost leadership and differentiation strategies impact strategic performance significantly, whereas cost-focus does not. A value of appropriate international business strategy is illustrated by supporting a relationship between strategy and international performance. The originality of contributions of the study lies in the fact that the generic business strategies’ impact on strategic performance is tested on an international market on the sample of Chinese firms. These notions enrich existing body of knowledge on strategic management. Therefore, companies conducting their business operations internationally should consider forming and implementing strategies of differentiation and cost leadership to achieve optimal business results.