{"title":"EXPRESS: Strategy Typology and Cost Structure: a Textual Analysis Approach","authors":"R. Banker, Rong Huang, Xiaorong Li, Yan Yan","doi":"10.1177/10591478241245144","DOIUrl":null,"url":null,"abstract":"This study investigates the impact of firms’ strategic positioning on cost structure. Using textual analysis based on 10-K filings, we capture business strategy along three dimensions: product leadership, customer intimacy, and operational excellence. Firms pursuing the product leadership strategy emphasize innovation and confront high congestion risk caused by rapid growth. We find that these firms display a more rigid cost structure by incurring higher strategic fixed investments in R&D and choosing higher committed capacity to reduce congestion risk. We also document that firms following the other two strategies on average exhibit a less rigid cost structure. This is possibly because customer-intimate firms tend to invest in specialized resources in small chunks and take on-demand inputs to tailor offerings, while operational-excellence firms may adopt real options and flexible models to achieve production efficiency and mitigate default risk. Our results are robust to using a difference-in-difference approach based on a quasi-natural shock caused by the Inevitable Disclosure Doctrine adoption and a change analysis based on firms’ internal strategic shifts. Our findings suggest that organizational strategy has a significant impact on firms’ resource commitments and capacity choices.","PeriodicalId":4,"journal":{"name":"ACS Applied Energy Materials","volume":"9 16","pages":""},"PeriodicalIF":5.4000,"publicationDate":"2024-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ACS Applied Energy Materials","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1177/10591478241245144","RegionNum":3,"RegionCategory":"材料科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"CHEMISTRY, PHYSICAL","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the impact of firms’ strategic positioning on cost structure. Using textual analysis based on 10-K filings, we capture business strategy along three dimensions: product leadership, customer intimacy, and operational excellence. Firms pursuing the product leadership strategy emphasize innovation and confront high congestion risk caused by rapid growth. We find that these firms display a more rigid cost structure by incurring higher strategic fixed investments in R&D and choosing higher committed capacity to reduce congestion risk. We also document that firms following the other two strategies on average exhibit a less rigid cost structure. This is possibly because customer-intimate firms tend to invest in specialized resources in small chunks and take on-demand inputs to tailor offerings, while operational-excellence firms may adopt real options and flexible models to achieve production efficiency and mitigate default risk. Our results are robust to using a difference-in-difference approach based on a quasi-natural shock caused by the Inevitable Disclosure Doctrine adoption and a change analysis based on firms’ internal strategic shifts. Our findings suggest that organizational strategy has a significant impact on firms’ resource commitments and capacity choices.
期刊介绍:
ACS Applied Energy Materials is an interdisciplinary journal publishing original research covering all aspects of materials, engineering, chemistry, physics and biology relevant to energy conversion and storage. The journal is devoted to reports of new and original experimental and theoretical research of an applied nature that integrate knowledge in the areas of materials, engineering, physics, bioscience, and chemistry into important energy applications.