Investigating the impact of strategic flexibility on the export performance of decorative stone exporting companies in Central Province

Dissertation for Master's Degree (M.A)

International Business Management

Abstract

Strategic flexibility and its effects on export performance are of particular importance. Researchers believe that strategic flexibility can potentially improve performance and increase profitability. The main question of this research:  "What effect does strategic flexibility have on export performance and export market development?" This research was conducted with the aim of investigating the impact of strategic flexibility on export performance. The findings showed the impact of strategic flexibility on export performance. At the end, some suggestions are given for managers and export managers. Knowledge-based programs can form an important part of the government's export policies. It is better for export-supporting organizations to prioritize the preparation and provision of information about export markets. Considering that each of the exporters moves independently from each other, and if the executive stages of export are depicted, it will be seen that what forces and large capitals are flowing in front of each other and are being wasted. Therefore, it is suggested; Exporters should form a committee or union with the help of government organizations (such as Export Development Center) to conduct marketing research and exchange information. Managers are also advised to consider environmental options in their strategic planning so that they can react to environmental changes. Keywords: strategic flexibility, export performance, exporting companies, business management, strategy, competitive advantage. It plays in the field of economy, because strengthening the production capacities and creating new capacities while paving the way for export development makes the government's role as a guarantor of existing investments and reducing monopoly more prominent. On the other hand, exports provide the possibility of using global markets for the growth of domestic production and enable manufacturing enterprises to be freed from the limitations of the domestic market and target global markets with the development of exports and take advantage of the economic benefits resulting from the scale of production. One of the most important tools of the export development strategy is having a comparative advantage in the turnover of foreign exchanges. A country may have an advantage in terms of production, but lack an advantage in terms of trade. The lack of commercial advantage from the relative inefficiency in the goods market in stages such as packaging, transportation, quality control, production standards, lack of access to information related to global trade, and so on.

Chapter One: General Research

1.1 Introduction

Researchers who have sought to identify the drivers of export success have found that marketing strategies and the strategies adopted by companies in their export market have an effect on determining export performance. In export marketing literature, there is a special interest in strategic flexibility and its effects on export performance. Flexible companies are those whose behavior is in line with the concepts of flexibility. (Hunt and Morgan, 1995)

These companies coordinate with the changes in the international environment and institutionalize the environmental changes in themselves. This can affect the export performance and increase the market share and the development of the export market of the product.

Researchers believe; Strategic flexibility can potentially improve performance and increase profitability and improve exports. The main question of this research is what effect does strategic flexibility have on export performance and export market development? 2.1 Statement of the problem Export performance is the result of organizational operations that include the company's internal and external achievements and goals. Here, export performance is defined as the achievement of organizational goals, and product development and market development, which will result in profitability for the company, are considered.The degree of success of a company in exporting can be evaluated by its export performance. To measure export performance, there are three different criteria: financial, non-financial and composite. Criteria such as sales, profit and growth are among the financial criteria and criteria such as success, satisfaction, achievement of goals are considered among the non-financial criteria. Composite criteria are also based on various types of performance criteria. Various researches have been conducted in the field of factors affecting export performance. Cooper, 2005)) In each of these researches, variables have been considered that, according to the researcher, were directly or indirectly effective on export performance. The number of investigated variables has been somewhat wide. This wideness is to the extent that it has even led to conclusions, ambiguities and contradictory findings. Most of the initial researches in the field of export were aimed at distinguishing exporters from non-exporters, which means that most of them considered the company's internationalization process. After that, the researchers turned to examining the external factors affecting export behavior, such as the right incentive programs. In the third step, the researchers investigated the factors related to the companies' behavior, according to the export and its results. The fourth group of researchers investigated and studied the factors that are effective on the export performance or success of companies. For example, Kasikid and his colleagues presented a model to investigate the effect of three factors of the company's objective characteristics, variables related to export understanding (export size and experience, export motivation, export problems, competitive advantages) and commitment to export (separate export sector, entry into the foreign market and customer selection criteria, constant visit to the export market, export planning and control) on discussed export performance in European countries. White, Griffith and Ryans also analyzed a number of methods for measuring export performance in the service sector.  Wallace and Baker also presented a model for variables affecting export performance in Australia. In this study, they divided the variables into two categories: intangible variables (tendency, skill, knowledge) and tangible variables (distribution, product, customer relationship, control, suppliers).  (Christensen, 2007)

1.2.1 Strategic flexibility

It is clear that market-oriented behaviors are not formed in a vacuum and many factors probably affect how the company's operations work in the international environment.                                                               (Aaby and Slater, 1999; Sousa et al., 2008; Zou and Stan, 1998)

But the basic issue that should be investigated in the literature of market orientation and export performance is the concept of strategic flexibility. The key goal of export performance research is to identify and evaluate the importance of export performance drivers. Strategic flexibility is one of the fundamental drivers and background in this case, because in the literature, strategic flexibility shapes the company's international performance.   (Buckley and Casson, 1998; Brouthers et al., 2008) Other research shows that strategic flexibility and export market development both play a fundamental role in determining organizational performance.   (Johnson et al., 2003) and both of them are required for business success.  Strategic flexibility is defined in the literature as follows: the company's ability to adapt and respond to environmental changes. Combe and Greenley, 2004, p. 1456) and the organizational ability to manage economic and political risks by responding in real time to market threats and opportunities (Grewal and Tansuhaj, 2001, p. 72). Research shows that in order to achieve strategic flexibility of future activities (creating real options for the company), exporters can invest in export structure and export strategies and create a system of coordinated export capabilities.  (e.g., Buckley and Casson, 1998; Johnson et al., 2003; Sanchez, 1995) Current investment in these options can provide access to more decision-making options that ultimately lead to increased profitability, greater market share, and sales growth. In this research, three sources of export flexibility have been identified. (Three types of investments that can create real options.