Strategic Abilities for Flexibility and Efficiency: A Quantitative Framework for Measuring Longterm Competiveness

Kristian Simoni Märcher

Student thesis: Master thesis

Abstract

This study presents a quantitative approach for efficiently measuring Strategic Abilities for Flexibility and Efficiency. This is done in order increase the knowledge in an area, which has become increasingly relevant, namely the area of how to achieve long-term competitiveness when markets are changing. More specifically the study is suggesting an approach to concretize and increase applicability of an area, which has previously been hard to use efficiently. The studies main foundation is inspired by the theories of Dynamic Capabilities (Teece et al., 1997; Teece 1997), but does moreover rely on a number of other studies. Based on these different scholars a ‘3-times-3 ability matrix’, arguably consisting of those abilities considered to be most relevant and widely accepted, is proposed. These abilities are linked with a number relevant slack measures, which enables these to be tested through statistical regression models. The established independent variables are tested on a sample of corporations listed on the Copenhagen Stock Exchange (Nasdaq OMX Nordic). More specifically 33 corporations from three different sectors are included in the study. Through the extensive testing the study is able to establish a highly relevant and applicable correlation between the performance measure Return on Assets and the two of the four measurable Strategic Abilities for Flexibility and Efficiency: Resource Applicability and Financial Strength, but does moreover acknowledge that a more holistic approach is necessary for fully identifying corporations long-term competitiveness in changing markets.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2014
Number of pages153