Managing competitive advantage in emerging knowledge-based economies: the strategic configuration perspective

In dynamic and complex business environments, firms increasingly rely on combinations of strategies rather than single competitive approaches. As China has transitioned from a labor-intensive to a knowledge-intensive economy, new strategic paradigms are required to manage competitive advantage. Drawing on 1,038 firm-level observations from China, this study examines how different configurations of competitive and portfolio strategies influence firm performance. We propose an integrated strategy matrix—the YMC model—that identifies nine strategic types and clarifies their performance implications. The findings demonstrate that strategic outcomes depend on the alignment between business-level competition and corporate-level investment decisions. This study contributes to strategy and knowledge management research by offering a configurational framework and actionable guidance for firms operating in transition economies.