TITLE

DOES AN EMPHASIS ON REVENUE GROWTH WEAKEN STRATEGY AND REDUCE PROFITS? AN EMPIRICAL ANALYSIS1

AUTHOR(S)
Pendse, Shripad G.
PUB. DATE
September 2011
SOURCE
International Journal of Business Strategy;Sep2011, Vol. 11 Issue 3, p135
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Michael Porter (1996) has argued that managers frequently fall into a 'growth trap', focusing on growing revenues at the expense of a weakened strategy and reduced profits. Research by others offers mixed support for Porter's argument. This study reports preliminary results from analyzing data on revenue and profits for two years from 1,000 large Canadian companies. It shows that the relationship between revenue and profits is weaker than one might expect, but it is a positive relationship. Thus Porter's conclusion may be valid but only to a limited extent.
ACCESSION #
67681762

 

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