Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 31 January 1999
Length: 4 pages
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Abstract
A basic premise of strategy is that superior profits occur when a corporation secures favorable positions in attractive industries, and pursues economies of scope across business units. This note draws on research that documents the importance of industry, positioning, and corporate-parent effects on profitability. The research shows differences in the influence of the effects for high and low performers, and differences for firms that are in the process of achieving and sustaining performance.
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Abstract
A basic premise of strategy is that superior profits occur when a corporation secures favorable positions in attractive industries, and pursues economies of scope across business units. This note draws on research that documents the importance of industry, positioning, and corporate-parent effects on profitability. The research shows differences in the influence of the effects for high and low performers, and differences for firms that are in the process of achieving and sustaining performance.