Linking financial performance to strategic orientation and operational priorities: An empirical study of third-party logistics providers
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AbstractPurpose - Aims to investigates the relationship of strategic choices of pure cost-, pure differentiation-, or a combination-strategy on a composite measure of financial performance for third-party logistics (3PL) providers in Hong Kong. In addition, it seeks to identify the importance of operations priorities underlying the respective adopted strategy, as well as the importance given to future competitive challenges for each strategy. Design/methodology/ approach - Uses cluster analysis, ANOVA. Findings - Logistics service providers classified to follow different strategies report different financial performance, with companies adhering to the combined strategy of cost and differentiation performing best, followed by pure differentiation companies, which in turn outperform pure cost-, commodity driven-companies. Research limitations/implications - Future research may be widened to include customer, and not solely competitor, perceptions. Further studies could elaborate on technology adoption, information sharing, strategy formulation, operations practices, and benchmarking. Other studies could focus on the differences between high and low performers in terms of business performance, and the processes that enable low performers to become high performers; as well as comparing logistics strategies and practices between different countries. Practical implications - Third-party logistics providers, solely competing on cost and offering basic services only, need to differentiate to gain improved financial performance. Logistics companies can improve along multiple operational dimensions to achieve competitive advantage in the marketplace. Research identifies operational areas to be emphasized to drive strategy according to strategic orientation, as well as generic factors that will drive future logistics management in Hong Kong. Originality/value - Linking perceived financial performance to strategic choices of pure cost-, pure differentiation-, or a combination-strategy for 3PL providers in Hong Kong. © Emerald Group Publishing Limited.
All Author(s) ListYeung J.H.Y., Selen W., Sum C., Huo B.
Journal nameInternational Journal of Physical Distribution and Logistics Management
Year2006
Month4
Day10
Volume Number36
Issue Number3
PublisherEmerald Group Publishing Ltd.
Place of PublicationUnited Kingdom
Pages210 - 230
ISSN0960-0035
LanguagesEnglish-United Kingdom
KeywordsFinancial performance, Hong Kong, Logistics data processing, Operations management, Third-party vendors

Last updated on 2020-05-08 at 02:00