THE ROLE OF INDUSTRY COMPETITIVE INTENSITY ON THE FINANCIAL AND STRATEGIC PERFORMANCE OF FIRMS: AN INSIGHT INTO THE HERBAL COSMETIC INDUSTRY OF INDIA

Abstract

Using an industrial-organizationalview, this paper sets out to examine the associationof the five forces of Porterwiththe financial and strategic performanceof the firm. The relevant study population is the marketing and project managers of Indian herbal cosmetic firms.  Data were collected from 131 respondents using a surveymethod and analysis using Structural Equation Modelling was done. As per results, no threat from new entrantswas seen and there was no influence of buyers' bargaining power on the firms' performance.The bargaining power of the supplier significantlyinfluences strategic performance and not financial.Moreover, the threat of substitute products influences financial performance and not the strategic one. The competitive rivalry among the firms exerts a significantly positive impact on both strategic and financial performance.