The impact of strategic consistency on market share and ROA

Abstract

Purpose – The purpose of this paper is to take a contingency theory approach to examine how performance is affected by the relationships between the Miles & Snow strategic groupings and a variety of marketing strategy concepts, including a firm's service focus, service growth, market coverage, marketing initiative, market growth, Porter strategy, and market orientation. Design/methodology/approach – Data for the study were gathered from a statewide survey among 125 chief executives of credit unions belonging to the Florida Credit Union League (FCUL). ROA figures were derived from government-mandated accounting reports in the state of Florida. ANOVA and correlation analysis were employed to analyze data. Findings – This study shows that firms that match an aggressive Miles and Snow profile with a more aggressive approach to seven other strategy dimensions often enjoy higher market share relative to credit unions characterized by a different alignment of the various aspects of marketing strategy. The results also suggest that achieving such a fit is not relevant to maximizing a firm's ROA. Research limitations/implications – The research sample was biased toward medium to larger firms that may possess strategic resources superior to those of the smaller firms in the industry. Also, credit unions may tend to have somewhat less aggressive profit objectives compared to other institutions in the banking industry. Practical implications – The findings outline to financial services executives the benefits of considering all dimensions of corporate strategy simultaneously, rather than one at a time. Originality/value – The paper illustrates how aligning certain aspects of marketing strategy can boost particular performance indicators and provides insight as to what the most appropriate alignments are depending on the circumstances.