This article identifies the strategic types in the hospital industry based on the hospital's use of Porter's generic strategies in their pure and hybrid forms. The article also examines differences in performance of hospitals across strategic types. Results indicate that hospitals that follow a focussed cost leadership strategy, in general, have superior performance on a variety of performance measures, while hospitals that use a combination of cost leadership and differentiation perform the poorest. Implications of findings for hospital administrators are also discussed.
Kamalesh Kumar, Ph.D., is Associate Professor of Management, School of Management, The University of Michigan-Dearborn, Dearborn, Michigan.
Ram Subramanian, Ph.D., is Associate Professor of Management, Seidman School of Business, Grand Valley State University, Allendale, Michigan.
Charles Yauger, Ph.D., is Associate Professor of Management, Department of Marketing and Management, College of Business Administration, Arkansas State University, State University, Arkansas.
The first two authors have made equal contribution to this study.