Do they Compete Differently? Strategies of MNEs and Domestic Companies in the Environment of the Czech Republic

Abstract

Purpose of the article: The Czech Republic is still considered an emerging economy and MNEs are important players in most of its markets. Hence, knowledge of their strategies is essential and valuable not only for companies already present on the Czech market, but also for those who intend to enter the Czech market. Methodology/methods: The analysis centres on a sample of 155 foreign multinationals and 118 Czech companies. Using the empirical data, a logistic regression model was subsequently employed to determine whether the strategies chosen by the firms are related to any of the environmental variables. I employed ANOVA and linear regression model to determine whether certain strategy choices are related to higher company performance for MNEs and DCs. Scientific aim: This study examines the strategy-environment configurations adopted by multinational and domestic companies in the Czech Republic and makes an assessment of which strategy is the most advantageous. Findings: The author concludes that the strategies of MNE and domestic companies differ in such a dynamic and hostile environment. The performance implications of the strategies deployed are also examined. The most significant result indicates that the adoption of a heterogeneous strategy-environment configuration by MNEs and domestic companies in a small-scale transition economy leads to better performance for both of them. Conclusions: The results imply that the adoption of a heterogeneous strategy-environment configuration by MNE and domestic companies in smaller transition economy leads to better performance for both of them. This study offers a different insight into the strategic behaviour of companies and extends the existing knowledge by adding the ownership variable into the strategy-environment relationship. Output of this study can serve as the basis for decision-making in companies already active in the Czech marketplace and, particularly, as important entry information for companies considering entering the market.