The Impact of Proactive Strategies on Market Performance in Economic Downturn: the Case of Hungary

Recession in 2008/09 affected almost all the European countries seriously but some of them were hurt to greater extent. The timing of economic downturns can never be appropriate but it found Hungary at the time when it was in a vulnerable condition leading to a prolong struggle to find the way out. However, each company’s own experience and approach in crisis can differ from what the whole economy would explain. This study aims to contribute to the emerging research field regarding the concept of proactive marketing. We investigated the relationship between approach to crisis as an opportunity and market performance. Based on a survey of 173 companies we demonstrated that proactive marketing can lead to better performance but larger companies have the advantage of implementing this strategy more successfully.

Értékteremtés e-kereskedelemmel – kitörési lehetőség a recesszió sújtotta magyar kiskereskedelemben? (Value creation of e-commerce – Chance to break out for the recession-hit Hungarian retail sector?)

Kimutatható-e az e-kereskedelem hatása a vállalati teljesítményre a recesszióval küzdő magyar kiskereskedelmi piacon? A hagyományos bolti értékesítés vagy on-line kereskedelem vezet hazánkban jobb pénzügyi teljesítményhez? Ezekre a kérdésekre a magyar IKT (infokommunikációs technológiai) kiskereskedők 187 elemű mintáján igyekeznek a szerzők választ keresni, az adatgyűjtést újszerű módon részben automatizált webpókokra bízva, következtetéseiket pedig elsősorban klaszterelemzési technikákra építve. Megállapítják, hogy bár a legjobb bolti kereskedők többnyire valamivel nagyobb és stabilabb profitrátákkal jellemezhetők a válság éveiben is, a piac megtartása és növelése terén már egyértelműen az e-kereskedők jeleskedtek. Eredményeik szerint az e-kereskedelem hozzásegítheti a kiskereskedőket a munkaerő-hatékonyság növeléséhez is, ám ha gyors rendelkezésre állással vagy alacsony árakkal csábítják vevőiket, akkor a profittöbblet egy részét felőrölheti a magasabb készlettartási igény vagy az árverseny. _____ The study examines whether e-commerce has a significant impact on corporate performance on the Hungarian retail market struggling with the effects of economic downturn. Is it brick-and-mortal retail or e-commerce that leads to a better financial performance? Using the innovative data gathering tools of automotive web crawlers the authors seek answers to these questions on a sample of 187 Hungarian ICT retailers. Based on cluster analysis they conclude that while the best traditional retailers have somewhat higher and more stable profitability ratios even during the years of recession, e-tailers are more successful in retaining and increasing their market share. E-commerce is also associated with higher human resource productivity, but the possible profit surplus originating from this advantage could be jeopardized in the long run as new electronic traders typically attract their customers by shorter service time or lower prices.

Agency theory problems behind the fall of shopping centers

The present article assesses agency theory related problems contributing to the fall of shopping centers. The negative effects of the financial and economic downturn started in 2008 were accentuated in emerging markets like Romania. Several shopping centers were closed or sold through bankruptcy proceedings or forced execution. These failed shopping centers, 10 in number, were selected in order to assess agency theory problems contributing to the failure of shopping centers; as research method qualitative multiple cases-studies is used. Results suggest, that in all of the cases the risk adverse behavior of the External Investor- Principal, lead to risk sharing problems and subsequently to the fall of the shopping centers. In some of the cases Moral Hazard (lack of Developer-Agent’s know-how and experience) as well as Adverse Selection problems could be identified. The novelty of the topic for the shopping center industry and the empirical evidences confer a significant academic and practical value to the present article.

Do institutions matter in business strategy? – The changing focus of strategic management to institutions: a literature review

The post-crisis managerial literature emphasizes the roles of institutional factors in any disruption of the ecosystem of market capitalism and puts it in the middle of its analytical framework. It has become clear that nowadays, scientific discussions about the measure of increase of direct state involvement in certain economic areas has become more relevant. The socio-economic model based on market coordination was no doubt shaken by the crisis in 2008 across the world and inspired various representatives of the scientific and political community to revise their theses on coordination mechanisms that support the way out of an economic downturn. This paper intends to give a brief summary of the two leading strategic management approaches (Porter’s five forces and the resource-based view of the firm) on institutions. The author’s aim is to demonstrate that incorporation of the institution-based view into the mainstream theories can enrich the analytical framework of strategic management by providing deeper understanding of the contextual factors that underpin interactions between institutions and organizations.