Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment

Abstract

Abstract This paper examines the relationship between manufacturing strategy and competitive strategy and their influence on firm performance. We test how competitive strategy influences manufacturing strategy and also examine the impact that manufacturing strategy and competitive strategy have on firm performance among Ghanaian manufacturing firms. We found significant and positive relationships between competitive strategy and the manufacturing strategies of cost, delivery, flexibility, and quality. The findings also indicate that quality is the only manufacturing strategy component that influences performance. Our results further show that although competitive strategy does not directly affect firm performance, it does so indirectly through quality. Thus, whether a firm chooses to pursue a cost leadership or a differentiation strategy an emphasis on quality provides the most benefits with regard to firm performance. An emphasis on quality appears to provide a means by which companies can mitigate the effects of increased competition resulting from the economic reforms within the Ghanaian manufacturing environment.