Porter's Generic Strategies and Firm Performance

Conclusion

The aim of this study was to find out the impact of Porter's generic strategies in increasing firm performance, through analyzing each of the generic strategies: low-cost strategy, differentiation strategy, and focus strategy. To find the relationship between variables of the study, three independent variables "LCS," "DS," and "FS," as well as one dependent variable "FP," were created. Three propositions have been made in the form of hypotheses: H₁, H₂, and H₃. By the correlation analysis, the relationship between independent variables was moderated, whereas in multivariate regression analysis enough information has been found for the impact of Porter's generic strategies on firm performance. Pearson's correlation and multivariate regression results have supported three research hypotheses raised in this research.

Also, two research questions were answered in this study. The first question was answered before the hypotheses verifications and the respondent firms were operating in a competitive industry, whereas after the hypotheses were tested, the second research question was answered. The findings of this research showed that three of Porter's generic strategies are important to increase firm performance. Also, empirical findings indicated that pursuing the differentiation strategy has a higher impact on increasing firm performance compared to two other Porter's generic strategies.

Applying Porter's generic strategies provides the firms to reach successfully the essential purposes of every firm that are to survive, to be profitable, and to increase the market share. This study makes a significant contribution to the scientific and academic value, regarding the impact of Porter's generic strategies to firm performance in Kosovo, in the region, and beyond.