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

Methodology/methods: The analysis has centred on a sample of 155 foreign multinational 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 aims to examine the strategy-environment configuration of multinational and domestic companies in the Czech Republic and to ascertain which strategy is the most advantageous.
Findings: When the environment is complex, MNEs tend to use prospector strategy to deal with such environment in the Czech Republic. For DCs, it is analyzer strategy. The findings also imply that in an emerging economy, an analyzer strategy for DCs and a prospector strategy for MNEs fit with dynamic and hostile environment, if the aim of these companies is to increase performance. In addition, a prospector strategy is related to higher performance for DCs.
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.