The Role of Strategy in Competitive Performance: The Case of Manufacturing Firms

Abstract

In the contemporary global economy, the manufacturing sector remains a critical engine for economic growth, innovation, and job creation, particularly in developing nations. However, maintaining a competitive edge in an era of rapid technological change and globalized supply chains requires more than just operational efficiency; it demands strategic clarity, coherence, and execution. This study empirically investigates the precise relationship between strategy formulation/implementation and the competitive performance of manufacturing firms. Utilizing a rigorous quantitative methodology, data were drawn from the third round of the international High-Performance Manufacturing (HPM) project, a comprehensive benchmark study encompassing 3,155 firms across five industrialized nations- Germany, Italy, Japan, South Korea, and the United States - operating in the electronics, machinery, and transportation sectors. The research employed a series of statistical techniques, including reliability analysis (Cronbach's Alpha), exploratory factor analysis (EFA), Pearson correlation, and linear regression, to test the central hypothesis. The findings robustly confirm a statistically significant and positive relationship (β = 0.448, p < 0.001) between a firm's strategic orientation and its competitive performance. This indicates that manufacturers with clearly defined, actively pursued, and effectively implemented strategies demonstrate superior performance across a wide spectrum of key metrics, including unit cost, product quality, delivery reliability, operational flexibility, and innovation, compared to their rivals. The study concludes that strategic management is not a peripheral administrative function but a core determinant of competitive advantage and sustained success in the manufacturing sector. Practical recommendations and strategic roadmaps are offered, particularly for emerging manufacturing landscapes like Vietnam, emphasizing the critical need for integrated strategic planning, robust implementation frameworks, and the seamless alignment of manufacturing activities with overarching business goals to enhance market position and ensure long-term viability.