Research team shows importance of investors on uniqueness of company strategies
Published Date: 3/16/2021
Source: phys.org
Corporate strategies should be as unique as possible, in fact highly specific to each individual company. This enables companies to compete successfully in the long term. However, the capital market and others, including analysts, often react negatively to the idea of unique strategies. The reason is that deviating from typical industry standards makes them more complex to evaluate. This regularly discourages companies from focusing on unique strategies, even though they would be beneficial for the company in the long term. This contradiction is known as the "uniqueness paradox." A research team from the Universities of Göttingen and Groningen has investigated the influence of different types of investors on the extent of the paradox and thus on the choice of unique strategies. The results were published in Strategic Management Journal.