Competitive Strategy and Firm Performance Analysis
Summary
Competitive strategy examines how firms position themselves relative to rivals to secure sustainable advantage, drawing on theories that highlight internal capabilities and external market structure. Firm performance analysis seeks to quantify how strategic choices translate into outcomes such as profitability, market share and growth. Scholars have contrasted the resource-based view, which emphasises the role of unique assets and dynamic capabilities, with industrial organisation theory, which focuses on industry-level determinants including entry barriers and competitive intensity. Methodological advances, including multilevel modelling and variance decomposition techniques, now allow researchers to disentangle effects at temporal, firm and industry scales, revealing the relative weight of leadership, organisational culture and contextual forces. Research into profit persistence underlines how higher-order resources such as strategic planning and innovation can extend periods of superior returns. Emerging work also considers spatial and network contexts, demonstrating that micro-geographic and interorganisational linkages refine our understanding of competitive dynamics. The study of performance has global significance, informing managerial decisions on resource allocation, corporate governance and policy regulation. By integrating theoretical insights with robust empirical methods, competitive strategy and firm performance analysis continues to guide practitioners and policymakers in navigating turbulent markets.
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Competitive Strategy and Firm Performance Analysis publication trend
The graph below shows the total number of articles in competitive strategy and firm performance analysis across all publications each year (not limited to Nature Index journals).
Technical terms
Resource-based view (RBV): A theoretical framework that emphasises internal firm resources and capabilities as the primary determinants of competitive advantage and performance.
Industrial organisation theory: A perspective focusing on how industry structure and competitive forces shape firm behaviour and profitability.
Firm effect: The portion of variation in performance attributable to firm-specific attributes such as leadership, culture and asset positions.
Industry effect: The share of performance variance explained by industry-level factors such as entry barriers, concentration and regulation.
Multilevel modelling: A statistical technique for analysing nested data structures, allowing simultaneous examination of effects at multiple levels (for example, time, firm and industry).
Profit persistence: The tendency for firms’ profitability to remain stable over extended periods, often due to enduring resources or capabilities.
References
- The CEO effect and performance variation over time. The Leadership Quarterly (2023).
- Under the spotlight: contextualizing the firm vs. industry debate through the introduction of neighborhood effects. Asia Pacific Journal of Management (2025).
- Understanding multilevel organizing: a focus of customer satisfaction on firm performance. The Journal of Marketing Theory and Practice (2024).
- Multilevel modeling for longitudinal data: concepts and applications. RAUSP Management Journal (2019).
- Performance persistence in the presence of higher‐order resources. Strategic Management Journal (2018).
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