Rivalry, strategic groups and firm profitability

Article Abstract:

An examination of the profitability of firms in the US pharmaceutical industry between 1963 and 1982 reveals that changes in strategic group membership have led to greater between group rivalry and lesser within group rivalry. The performance of pharmaceutical firms during the periods 1980-92, 1975-79, 1970-74 and 1963-69 shows that while the industry, as a whole, remained highly profitable, profitability rates within the industry dropped significantly through the years. This observed decline in profitability is empirically linkedto the changing configuration of strategic groups within the industry during the four periods studied. Thus, firm profitability in the industry can be traced to the shift to between group rivalry, rather than such factors as strategic distance and the distribution of firms according to number and size of firms, all of which are shown to have no impact on profitability.

Pharmaceutical preparations, Pharmaceutical industry, Finance, Profit

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Power and firm profitability in supply chains: French manufacturing industry in 1993

Article Abstract:

The influence of market power on firm profitability has been a frequently studied and debated subject in different fields of research. To expand understanding of this relationship, a study was conducted examining the associations between the power of suppliers and buyers and the profitability of sellers in the middle of suppliers and buyers. This analysis, which employed a new database from Banque de France on the manufacturing sector of France, sought to empirically identify different concepts of power and their link to profitability. Findings revealed a number of power concepts. It was found that industry effects are more influential than firm effects in determining seller profitability. Moreover, buyer power was found to account for a much greater percentage of the variance in seller profitability than supplier power.

MISCELLANEOUS MANUFACTURING INDUSTRIES, Manufacturing NEC, All Other Miscellaneous Manufacturing, Manufacturing industry, Manufacturing industries, France, Business-to-business market, Business to business market, Industrial suppliers, Corporate profits, Power (Social sciences), Political power

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Business strategy, market structure and risk-return relationships: a structural approach

Article Abstract:

Strategic management research has revealed significant relationships between risk-return outcomes, strategic conduct, and market share. A model integrating strategic relations between risk-return outcomes, market share, and firm conduct attributes offers insight into the multiple determinants of risk at the business unit level. An analysis of commercial banking in Indiana between 1975-79 using the model reveals that the impact of market share and firm conduct on risk-return outcomes is dependent on the intensity of rivalry. The effect of market share is of major importance, and the measured effect of market share reflects the exercise of a firm's market power. In oligopolistic markets, returns reflect the exercise of market power, while in competitive settings, the firm's ability to exercise market power is limited.

Analysis, Management, Risk assessment, Corporations, Strategic planning (Business)

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