Cost Leadership or Differentiation? Empirical Study on Dominant Competitive Strategy of Xinhua Chemical

Using data collected from the Xinhua Chemical Co.,Ltd in Shanxi province, this paper mainly probed into which was dominant competitive strategy that supported Xinhua Chemical´s low cost and fast development. In the mean while, we also investigated relationship between two generic competitive strategies and firm´s different performance, and between two types of generic competitive strategies. The results are that: dominant competitive strategy of Xinhua Chemical is cost leadership; marketing differentiation strategy has a significantly positive impact on firm´s financial performance, customer differentiation strategy has a positive impact on firm´s market and financial performance, but insignificant, cost leadership has a significantly positive impact on firm´s market performance; two types of generic competitive strategies can be implemented simultaneously.