Are Strategic Frameworks Still Applicable? Analyzing the Strategy-Performance Relationship in Germany

This study examines the strategy-performance relationship within publicly traded German firms. Strategic management literature provides several strategic frameworks that offer guidance on promising strategies. However, due to major changes such as globalization and fundamental differences between the strategic frameworks, managers wonder whether strategic frameworks are still applicable and, if so, which one is the right one. We analyze a sample of 4,364 firm-years among 543 firms between 2006 and 2017. Our results suggest that Miles and Snow's (1978) approach best fits to German firms. We find efficiency strategy as well as analyzer strategy and hybrid strategy to be associated with superior performance within the industry. However, we find varying results for differentiation strategy. In additional analysis we explore the impact of strategic persistence on performance and the relationship between strategic focus and performance. We find varying results regarding the advantageousness of strategic persistence over strategic flexibility and support for an inverse U-shaped relationship between strategic focus and performance. Our results contribute to the discourse on the strategy-performance relationship as our results provide insights into promising strategies that are of interest for researchers and practitioners