Product Stereotypes, Strategy and Performance Satisfaction: The Case of Chinese Exporters
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Stereotypes, Strategy
and
Performance Satisfaction: The
Case
of
Chinese
Exporters Lance Eliot Brouthers* UNIVERSITY OF AKRON
Kefeng Xu** UNIVERSITY OF TEXAS AT SAN ANTONIO
Does following a product strategy of price leadership result in superior performance satisfaction for Chinese exporters? Does branding products and targeting less developed countries significantly improve Chinese exporters' satisfaction with export performance? Results indicate performance satisfaction decreased when Chinese
firms pursued price leadership product strategies. While performance satisfaction increased when Chinese exporters used a branding product strategy, brandingproducts and targeting other less developed countries with these brands significantly increased performance satisfaction over branding alone.
ow should firms choose their international product strategies?Brouthers, Wernerand Matulich (2000) provided some initial guidance on this question. They posited that "... historically,unique home-country environments encouraged the development of distinct price/quality productstrategies.. ."which ". .. reinforce consumer/competitor perceptionsaboutthe nature of home-countryproductsvis a vis
tions, Brouthers, Werner and Matulich (2000) posited that firms that pursued a strategy of reinforcing existing perceptions had a higher likelihood of achieving success than those that did not. As a consequence, such firms were hypothesized (1) to be more prevalent than other types of Multinational Corporations (MNCs) and (2) on average, to achieve higher profitability (measured by Return on Assets-ROA, Return on Sales-ROS). These hypotheses were based on the concept of "strategic fit," (Venkatraman
foreign competitors" (2000, p. 40). Because reinforcing existing perceptions is easier than changing percep-
*Dr. Lance Eliot Brouthers is Professor of International Business in the College of Business Administration at the University of Akron. **Dr. Kefeng Xu is an Assistant Professor in the College of Business at the University of Texas at San Antonio. We wish to thank Tom Brewer for his helpful guidance in the development of this paper. Both authors contributed equally. JOURNAL OF INTERNATIONALBUSINESS STUDIES, 33, 4 (FOURTH QUARTER
2002): 657-677
657
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CHINESE EXPORTING STRATEGIES and Prescott, 1990; Hambrick, 1988; Prescott, 1986; Anderson and Zeithaml, 1984) which suggests that aligning a strategy with its environment results in superior firm performance. More specifically, Brouthers, Werner and Matulich (2000) dubbed reinforcing perceptions about home country products, a "regional stereotypes" product strategy. Brouthers, Werner and Matulich (2000) restricted their study to the global performance (ROA, ROS) of large, publicly held MNCs (e.g. beverages, consumer electronics, automobiles, tires) from Japan, the U.S.A. and the European Union (EU). Their findings supported thei
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