The Impact of Strategic Management and the Performance of the Largest U.S. Startups
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In 2003, 358 firms are newly listed in Fortune 500 Index compared with 1993 Fortune 500 Index. A simple OLS shows that the number of new Fortune entrants increases as industries experience higher GDP share growths; however, the number of new Fortune entrants are likely to decrease as industries mature, which is consistent to the prediction of product life cycle. Among 358 entrants, this paper particularly focuses on 103 startups that are founded after 1945. According to a historic analysis, some strategic behaviors have stimulated their success: niche market creation with strong brand quality, diversification, and sales network development with foreign expansion. Based on three strategic behaviors, we attempt by-scenario analysis. In that, the linear combination, 2-variable-combination, and 3-variable-combination of three strategic behaviors are examined. Among three strategic behaviors, niche marketing has the largest effect on the size expansion and profitability of new Fortune startups and the impact of foreign sales expansion is as large as niche marketing. Between related diversification and non-related diversification, the latter has positive and significant effects on the two performance measures. 2-variable-combination scenario results show that the size expansion and profitability of the Fortune startups become largest when they are highly diversified with foreign sales. According to 3-variable-combination scenario, the sales growth of the Fortune startups becomes highest when they are highly diversified pioneers with foreign sales, which means that new Fortune startups are likely to grow the most rapidly when they are implementing all three strategic behaviors simultaneously. By-scenario probit analyses forecast that niche marketing is the shortcut to construct admired brand images.
Abstract
In 2003, 358 firms are newly listed in Fortune 500 Index compared with 1993 Fortune 500 Index. A simple OLS shows that the number of new Fortune entrants increases as industries experience higher GDP share growths; however, the number of new Fortune entrants are likely to decrease as industries mature, which is consistent to the prediction of product life cycle. Among 358 entrants, this paper particularly focuses on 103 startups that are founded after 1945. According to a historic analysis, some strategic behaviors have stimulated their success: niche market creation with strong brand quality, diversification, and sales network development with foreign expansion. Based on three strategic behaviors, we attempt by-scenario analysis. In that, the linear combination, 2-variable-combination, and 3-variable-combination of three strategic behaviors are examined. Among three strategic behaviors, niche marketing has the largest effect on the size expansion and profitability of new Fortune startups and the impact of foreign sales expansion is as large as niche marketing. Between related diversification and non-related diversification, the latter has positive and significant effects on the two performance measures. 2-variable-combination scenario results show that the size expansion and profitability of the Fortune startups become largest when they are highly diversified with foreign sales. According to 3-variable-combination scenario, the sales growth of the Fortune startups becomes highest when they are highly diversified pioneers with foreign sales, which means that new Fortune startups are likely to grow the most rapidly when they are implementing all three strategic behaviors simultaneously. By-scenario probit analyses forecast that niche marketing is the shortcut to construct admired brand images.
참고문헌 (43)
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