A Study On The Time-lag Effect Of Competitive Strategy On The Enterprise Performance

The relationship between the enterprise strategy and the enterprise performance is always one of the hot topics in the area of strategic management. Currently, most of the relative researches discuss whether or not competitive strategy has an effect on corporate strategy and the differences of various types of strategies on enterprise performance and so on. Some studies discuss the persist influence of competition strategy on performance. However, few scholars further detect when corporate performance would be generated after the implementation of the strategy as well as the duration of the influence period. Therefore, this paper analyzes the lagged effect of the competition strategy from the perspective of lagged period, persistence and the degree of influence.Based on porter’s basic classification of competitive strategy, the study firstly defines the competitive strategy and summarizes the related theory of competition strategy and enterprise performance. After the analyzing the mechanism of competitive strategy influence on enterprise performance, we provide the research hypothesis. Then, the Confirmatory Factor Analysis is conducted to construct differentiation factor and low-cost factor to reflect the company’s competitive strategy with quarterly financial data of Chinese pharmaceutical and biological listed companies from2003to2012. At the same time, we design the strategic performance indexes which are consist of over debt paying ability, operation ability, profit ability and development ability and cash flow situation, and make use of the grey relational analysis method to build the competition strategy performance comprehensive index. And on the basic of this index, vector auto-regressive and the impulse response are used to explore the Time-lag effect. Our empirical study is carried out based on the strategic groups and individual companies to detect the lagged period, persistence and the degree of influence.The results show that the enterprise performance is generated after the implementation of the specific competitive strategy. In other words, there is an interval between the performance generation and the implementation of the strategy. At the same time, Competitive strategy influence enterprise performance persistently to some degree. This time-lag effect are differently characterized by the differentiation strategy and low cost strategy, both the lag period and sustainability of the differentiation strategy is longer than that of the low cost strategy. Meanwhile, compared to the low cost strategy, the differentiation strategy is more difficult to be successfully implemented as the differentiation strategy may be faced with more implementation risks.