Empirical Research On The Impaction Of Competition Strategy To Enterprise Value

With the developing of global economic integration, the competition between enterprises has grown up day by day. Enterprises have to put the competitive strategy on the primacy when making strategic decision. On one hand, enterprises have to make the competitive strategy which can bring strong competitive advantages; on the other hand, the enterprise must identify the competitive strategy of the competitors so as to take preventive measure timely, reducing loss of competition. The quality of the implementation of competitive strategy business will also affect investment effects of investors. Therefore, considering the impact from competitive strategy to the enterprise value can play a very important role for the enterprises to make the competitive strategy and determine the competitive strength of competitors, and also for the investors to determine investment strategy to investors. However, the identification method of competitive strategy is not comprehensive enough currently, and the relationship between competitive strategy and firm value has not been explained clearly. This study will analysis the identification method of the competitive strategy and how the strategy impact the firm value. This can enrich the methods of competitive strategy identification,improve the theoretic system of firm value,provide a way for the enterprise making competitive strategy and the investors making investment decision.First of all, the study defines the competitive strategy, analysis and elaborates the theories of competitive strategy and firm value. The competitive strategy will be divided into two parts, one is low-cost competitive strategy, the other is the differentiation competitive strategy. We choose the financial recognition of the two competitive strategy through the way of factor analysis and cluster analysis. We propose two hypotheses while analyzing how the competitive strategies impacting the firm value, then set a model to reflect the relationship between competitive strategies and firm value. This study chooses all the A-share listed companies of manufacturing industry in Shanghai and Shenzhen stock market from the year 2005 to 2009 as the research sample. Then we use 7 sub-class industries which are satisfying the classifying standards of sub-class industries to do empirical analysis and obtain empirical results. We use the factor analysis to identify the low-cost factor and the differentiation factor, and also identify the competitive strategy of enterprises with the help of these factors. the result of empirical analysis shows that both the differentiation competitive strategy and the low-cost competitive strategy have the positive inflation to the firm value. But the role of these two strategies is different in each industry. This study also shows the most appropriate competitive strategy for 7 industries. At last, based on the result of this study, we put forward proposals for the enterprises making competitive strategies,indentifying the competitive strategies of competitors and for the investors making investment decisions.