Evaluating strategy with internal and environmental effects. A response elasticities approach

  • Rutledge D
  • Wilson R
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Abstract

When assessing strategy effectiveness, managers are challenged to identify and evaluate two major types of effects-internal firm strategy effects and external environmental effects. A study of the U.S. non-rubber footwear market is presented that illustrates how these effects impact firm profit performance. Seven firm-specific equations are specified in multiplicative model form and estimated simultaneously with econometric methods. The resulting coefficients can be directly compared being measured as constant response elasticities. Using these coefficients, strategies for both the firm and its competitors are inferred and evaluated for their effectiveness. J busn res 1994. 31.213-224. © 1994.

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Authors

  • Daniel P. Rutledge

  • R. Dale Wilson

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