Nexus between Competitive Business Strategy and Firm Performance: Moderating Effect of Competitive Intensity

Business strategy literature argues that firm survival and growth in any competitive environment depend on the adaptation of suitable competitive business strategies. Despite the growing interest in strategic management within the fish farming industry, there is a notable lack of empirical evidence exploring how the competitive environment influences companies’ business strategy and performance. This paper examines the direct effect of competitive strategy and the moderating effect of competitive intensity on business strategy-performance relationship. Using hierarchical regression to analyze 306 samples gathered from fish farming firms of south-Benin, empirical evidence shows that competitive strategy including cost-leadership, and both product quality and marketing differentiation strategies impact positively firm financial performance. This research highlights the relative importance of product quality differentiation strategy. In addition, findings indicate that competitive intensity structure contribute to firm success. Surprisingly, findings show that competitive intensity does not significantly moderate the effect of cost-leadership and product differentiation strategies. Besides, the effect of marketing strategy on firm performance becomes more negative under high competition in the domestic market. Study recommends that firms should gain organizational economic outcomes by pursuing cost-leadership strategy and product differentiation strategy whatever competitive intensity states in the domestic market of fish farming.