Strategies for Superior Performance under Adverse Conditions: A Focus on Small and Medium Sized High-Growth Firms

46 Pages Posted: 24 Jan 2009 Last revised: 7 Aug 2012

See all articles by Vassiliki C. Bamiatzi

Vassiliki C. Bamiatzi

Independent

Tom Kirchmaier

London School of Economics - Centre for Economic Performance; Copenhagen Business School

Date Written: January 20, 2011

Abstract

In this paper we study how small and medium sized firms successfully decouple themselves from declining markets. Based on detailed interviews with 20 small business top managers, we observe that most firms employ a multiple-strategy approach, simultaneously pursuing a differentiation and a product-service customization strategy. Most aimed to serve the entire market spectrum but aimed to differentiate themselves through aggressive innovative and product customization. Following this strategy, firms actively search for the high-margin products, avoid aggressive price competition, while at the same time keeping a very tight tab on costs. Most surprisingly, there is agreement that operating in such a market environment is rather ‘exciting’, pointing to the special role the manager plays in identifying the strategies that can alleviate the negative effects of the environment and grow irrespectively.

Keywords: declining industries, small firms, over-performers, divergence

JEL Classification: M13

Suggested Citation

Bamiatzi, Vassiliki C. and Kirchmaier, Tom, Strategies for Superior Performance under Adverse Conditions: A Focus on Small and Medium Sized High-Growth Firms (January 20, 2011). Available at SSRN: https://ssrn.com/abstract=1332087 or http://dx.doi.org/10.2139/ssrn.1332087

Tom Kirchmaier

London School of Economics - Centre for Economic Performance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 207 955 6854 (Phone)

HOME PAGE: http://sites.google.com/site/tomkirchmaier/home

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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