This paper examines the relationship of strategy factors on firm performance of Taiwan high-tech industry (LCD, LED and semiconductor) using industry life cycle approach. Firm profit is the fundamental driver for company survival. In terms of profitability, ROE, ROS and ROI are the most common measures of firm performance. Initially, identifying those industries in the stage of industry life cycle (introduction, growth and maturity) is critical.
Major factors associated with competitive advantage which are significant for strategy formulation are selected such as market share, innovation activity, manufacturing cost, plant and equipment newness also employee productivity. In addition, the study also examines the influence of firm’s age and size on profitability.
Our results are mixed with quite strong relationship between ROE and ROI instead of ROS. Since, life cycle stage itself is a dynamic concept, therefore it would influence strategy factors to behave towards the profit. Strong relationship of strategy factors such as market share, innovation activity, plant and equipment newness, manufacturing cost also employee productivity influence the sensitivity degree of profit. We also found the market share, innovation activity, manufacturing cost and employee productivity are key determinants as the size or age influence the profit.

Abernathy, W., & Utterback, J. M. (1978). Patterns of industrial innovation. Technology Review, 80(7), 97-107.
Agarwal, R., Sarkar, M., & Echambadi, R. (2002). The conditioning effect of time on firm survival: An industry life cycle approach. Academy of Management Journal, 45(5), 971-994.
Anderson, C. R., & Zeithaml, C. P. (1984). Stage of the product life cycle, business strategy, and business performance. Academy of Management Journal, 27(1), 5-24.
Anderson, P., & Tushman, M. L. (1986). Technological discontinuites and organizational environments. Administrative Science Quarterly, 31, 439-465.
Anderson, P., & Tushman, M. L. (1990). Technological discontinuities and dominant designs : A cyclical models of technological change. Administrative Science Quarterly, 35, 604-663.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120.
Baum, J. A. C. (1995). The changing basis of competition in organizational populations: The Manhattan hotel industry 1887-1990. Social Forces, 74, 177-205.
Bercovitz, J., & Mitchell, W. (2007). When is more better? The impact of business scale and scope on long-term business survival, while controlling for profitability Strategic Management Journal, 28(1), 61-79
Bourgeois III, L. J. (1980). Performance and consensus. Strategic Management Journal, 1(3), 227–248.
Brittain, J. W., & Freeman, J. (1980). Organizational proliferation and density-dependent selection. In J. Kimberly & R. Miles (Eds.), Organizational Life Cycles (pp. 291-338). San Francisco: Jossey-Bass.
Carrol, G. R. (1985). Concentration and specialization: Dynamics of niche width in populations of organizations. American Journal of Sociology, 90, 1262-1283.
Carrol, G. R., & Hannan, M. T. (1989). Density delay in the evalution of organizational populations: A model and five empirical tests. Administrative Science Quarterly, 34, 411-430.
Chandler, G. N., & Hanks, S. H. (1993). Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing, 8(5), 391–408.
Chang, S.-C. (2005). The TFT–LCD industry in Taiwan: Competitive advantages and future developments. Technology in Society, 27(2), 199–215.
Chou, L. P., & Shing, H. D. (2008). Technological regimes and firm survival: evidence across sectors and over time. Small Business Economics, 30, 175-186.
Cox, W. E. (1967). Product life cycles as marketing models. Journal of Business, 40(4), 45-53.
D' Aveni, A. (1994). Hypercompetitions, Free Press. New York.
David, P., Hitt, M. A., & Gimeno, J. (2001). The influence of activism by institutional investors on R&D. Academy of Management Journal 44, 144-157.
Dean, J. (1950). Pricing policies for new products. Harvard Business Review, 28, 45-53.
Directorate-General of Budget, A. a. S. (2006). 2006 Analysis of census result Retrieved. from http://eng.stat.gov.tw/lp.asp?ctNode=1623&CtUnit=773&BaseDSD=7.
Dunne, T., Roberts, M. J., & Samuelson, L. (1989). Growth and failure of manufacturing plants. Quarterly Journal of Economics, 104, 671-698.
Geringer, J. M., Beamish, P. W., & DaCosta, R. C. (1989). Diversification strategy and internationalization: Implications for MNE performance. Strategic Management Journal, 10(2), 109–119.
Geroski, P. A. (1995). What do we know about entry? International Journal of Industrial Organization, 13, 450-456.
Gong Ming, Q., & Lee, L. (2003). Profitability of small-and-medium sized enterprises in high-tech industries : The case of biotechnology industry Strategic Management Joumal, 24, 881–887.
Gort, M., & Klepper, S. (1982). Time paths in the diffusion of product innovations. Economic Journal 92, 630-653.
Grant, R. (1987). Multinationality and performance among British manufacturing companies. Journal of International Business Studies 18(3), 79-89.
Hamel, G., & Prahalad, C. K. (1994). Competing for the future. Harvard Business Review, 72, 122-128.
Hannan, M. T. (1986). Competitive and institutional process in organizational ecology, Technical Report. New York: Department of Sociology Cornell University.
Hannan, M. T. (1999). Inertia, density and the structure of organizational populations: Entries in European automobile industries, 1886-1981. Organization Studies, 18, 193-228.
Hannan, M. T., & Carrol, G. R. (1992). Dynamics of organizational populations: Density, competition, and legitimation. New York: Oxford University Press.
Huang, C. J., & Liu, C. J. (2005). Exploration for the relationship between innovation, IT and performance. Journal of Intellectual Capital, 6(2), 237-252.
Huang, M. J. (2010). Global LED manufacturing 2009 feedback and 2010 expectation. Unpublished Report. Industrial Economic and Knowledge.
Jovanovic, B. (1982). Selection and the evolution of industry. Econometrica, 50, 649-670.
Jovanovic, B., & MacDonald, G. (1994). The life-cycle of a competitive industry. Journal of Political Economy, 102, 322-347.
Kobrin, S. J. (1991). An empirical analysis of the determinants of global integration. Strategic Management Journal, 12(Summer Special Issue), 17-37.
Levinthal, D. (1991). Random walks and organization mortality. Administrative Science Quarterly, 36(1), 397–420.
Levitt, T. (1965). Exploit the product life cycle. Harvard Business Review, 18, 81-94.
Liu, M. J. (2010). Expecting the returning dawn - 2009 global large TFT-LCD panel business review and analysis. Unpublished Report. Industrial Economics and Knowledge.
Malerba, F., & Orsenigo, L. (1996). The dynamics and evoloution of industries. Industrial and Corporate Change, 5, 51-88.
Mansfield, E. (1983). Technological change and market structure: An empirical study. American Economic Review of Financial Studies, 73, 205-209.
McGahan, A., & Silverman, B. (2001). How does innovative activity change as industries mature? International Journal of Industrial Organization, 19(7), 1141-1160.
Mohr, J., Sengupta, S., & Slater, S. (2005). Marketing of High-Techonology Products and Innovations (2nd ed.). New Jersey: Pearson Education.
Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge MA: Harvard University Press.
Orr, D. (1974). An index of entry barriers and its application to the market structure-performance relationship. Journal of Industrial Economics, 23, 39-50.
Peters, L. (2005). Semiconductor market steady as she goes [Electronic Version]. Industry Watch, 28, 19-21,
Porter, M. E. (1985). Competitive Advantage: Creating and sustaining superior performance, Free Press. New York.
Robins, J. A., & Wiersema, M. F. (1995). A resource-based approach to the multibusiness firm: Empirical analysis of portfolio interrelationships and corporate financial performance Strategic Management Journal, 16(4), 277–299.
Schilling, M. A., & Hill, C. W. L. (1998). Managing the new product development process: Strategic imperatives. Academy of Management Executives(12), 67-75.
Schoonhoven, C. B., Eisenhardt, K. M., & Lyman, K. (1990). Speeding products to market: Waiting time to first product introduction in new firms. Administrative Science Quarterly, 35, 177-207.
Spanos, Y., Zaralis, G., & Liokas, S. (2004). Strategy and industry effects on profitability: evidence from Greece. Strategic Management Joumal, 25, 139-165.
Su, J. K. (2010). Analysis of global IC design development and trend. Unpublished Report. Industrial Economics and Knowledge
Suarez, F. F., & Utterback, J. M. (1995). Dominant designs and the survival of firms. Strategic Management Joumal, 16, 415-430.
Sutton, J. (1997). Gibrat's legacy. Journal of Economic Literature, 35, 40-59.
Tallman, S., & Li, J. T. (1996). The effects of international diversity and product diversity on the peformance of multinational firms. Academy of Management Journal, 39(1), 179–196.
Venkatraman, N., & Ramanujam, V. (1987). Measurement of business economic performance: An examination of method convergence. Journal of Management, 13, 109–122.
Vernon, R. (1966). International investment and international trade in the product cycle. The Quarterly Journal of Economics, 80(2), 190-207.
Weiner, N., & Mahoney, T. (1981). A model of corporate performance as a function of environmental, organizational, and leadership influences. Academy of Management Journal, 24, 453–470.
Williamson, O. E. (1975). Market and hierarchies: Analysis and antitrust implications. New York: The Free Press.
Zahra, S. A., Ireland, R. D., & Hitt, M. A. (2000). International expansion by new venture firms: International diversity, mode of market entry, technology learning, and performance. Academy of Management Journal of Economic Theory, 43 (5), 925–950.