Assessing the Impact of Market-Focused and Price-Based Strategies on Performance: A Neural Network Typology

Marketing practitioners operate in a turbulent environment with increased market competition and more discerning customers, which make it a necessity for organisations to constantly re-appraise their competitive strategies. Porter's (1980) typology is one of the most widely cited by academics and practitioners, but it is debatable whether a single strategy will lead to sustainable competitive advantage (Helms, Dibrell and Wright, 1997).

Using a systems perspective where the focus is on the interaction between dependent and independent variables, this study shows how SBU managers could use neural networks to help improve the strategy formulation process in the hospitality sector. Findings suggest that market-focused and price-based strategies have contrasting effects upon performance. This study extends the knowledge of strategy formulation and performance by focusing on the service industry, and provides controls for market-level influences by being restricted to the hotel sector.