Business Strategy versus Performance Trade-offs

Abstract

The tea industry in India is facing turbulent weather, both literally and figuratively. This study has mapped out competitive strategy in the Indian tea industry based on a sample of the 14 largest players. It is found that important trade-offs between the business-level strategy adopted and the performance objective may help the firms in this industry move ahead in a more focused manner. It appears that the simultaneous pursuance of profitability and growth/market position in this industry may be counter-productive. But, aiming for growth may also help attain market position. Profitability appears to stem from enhanced scope (higher distribution and international presence) and increased differentiation (higher advertising). Higher levels of efficiency and a lower level of asset parsimony too seem to favour higher profitability. The strategy of differentiation appears to be helping achieve both growth and market position. Cost leadership measures may also lead to growth, though not to a very high degree of market position.