Risky business: How strategy relates to survival

This research explores the relationship between business strategy and survival. Seven annual panels of longitudinal data enable us to study riskiness (likelihood of failure) as a function of business strategy. We find failure rates are higher for those businesses with purer strategy positions. Two mechanisms are offered as potential explanations for this result: robustness and adaptability. While prior research has found pure strategies have higher returns, our findings suggest that pursuing a hybrid strategy may be an entirely reasonable choice, balancing risk and return.