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  April 19th, 2016 | Written by

Hybrid Strategy Works Best When High-Tech Companies Go Global

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  • Study says hybrid strategy creates conditions for internationalizing companies to achieve best financial performance.
  • Study challenges theory that a company should try either differentiation or cost leadership when going international.
  • Conditions of the home markets of firms have received too little attention in globalization strategy work.

Following a hybrid competitive strategy leads to superior financial performance in the internationalization of high-technology companies, shows a new Finnish study in the field of marketing. The study challenges the traditional viewpoint according to which companies can successfully go international by adhering to a single competitive strategy alone.

The study by Professor of International Business Mika Gabrielsson from the University of Eastern Finland, Senior Researcher Tomi Seppälä from Aalto University, and Professor of Marketing Peter Gabrielsson from the University of Vaasa was published in the April issue of Industrial Marketing Management.

The study used empirical data to analyze companies’ implementation of a hybrid competitive strategy and their achievement of financial profitability while internationalizing in the high-technology market. The study analyzed the competitive strategies of 259 Finnish and Swedish companies.

Earlier studies in the field of marketing research have proposed inconclusive viewpoints relating to the conditions that are suitable for multinational companies to realize a hybrid competitive strategy. This new study now shows that the realization of a hybrid competitive strategy is dependent on the globalization stage and key resources of the company. Furthermore, a hybrid strategy observes environmental factors and creates the preconditions for internationalizing companies to achieve the best possible financial performance.

The Finnish study challenges the theory by Michael Porter, a Harvard Business School professor and consultant, according to which a company should adhere to a single competitive strategy, either differentiation or cost leadership, when going international.

Professor Gabrielsson is excited about these novel results. “Globalization and the specific conditions of the home markets of the firms have received too little attention in the strategy work. Particularly dangerous it is for a firm originating from a small country to rely on the American research, books, and consultants who approach this question from a large country perspective,” he said.