Journal of Retailing and Consumer Services 11 (2004) 51–59 The effectiveness of strategic planning: competitiveness in the Brazilian supermarket sector Mario Tanabe a,b , Claudio Felisoni De Angelo a,b , Nicholas Alexander c, * a Business Administration Department, School of Economics and Business Administration, University of S * ao Paulo, S * ao Paulo, Brazil b Av. Prof. Luciano Gualberto, 908—Pr ! edio FEA 1—sala G-127, Cidade Universit ! aria, S * ao Paulo, SP 05508-900, Brazil c School of Business, Retail and Financial Services, University of Ulster, Coleraine BT52 1SA, UK Abstract This paper considers the relative impact of management strategic planning practices and economic changes on company performance. The paper focuses on the Brazilian supermarket sector during the period 1988–1999. This was a period marked by significant changes in economic and competitive conditions. Using sales figures as indicators of company performance, ANOVA tests were applied. The results derived suggest that variables representing changes in economic conditions and strategic planning were both statistically significant when they were used to explain performance differences among Brazilian supermarket operations. Differences in company management practices were found to play a more important role than changes in the environment. However, the results clearly suggest that management by itself was unable to take advantage of the upward and downward movements in the economy to modify the relative competitive positions of companies operating within the market. This finding challenges the existing literature on strategic planning. r 2003 Elsevier Science Ltd. All rights reserved. Keywords: Planning; Advantages; Disadvantages; Chaos; Supermarkets; Analysis of variance 1. Introduction While the management literature has discussed, for some time, the contribution of rational planning processes to the successful achievement of competitive advantage, the ability of management to achieve super- ior organisational performance through strategic plan- ning is debatable. Indeed, it has only been relatively recent that management theorists have established the presumption that strategic planning has a central role to play in competitive behaviour. Although, business strategy was raised as an important issue by economists such as Coase (1937), Schumpeter (1942) and Penrose (1959), for a long time, economic theory treated markets as beyond the control of individuals and organisations (Drucker, 1974). However, the need to overcome widespread economic collapse in the middle years of the twentieth century demonstrated the importance of formal strategic thought in the decision-making process. This led Andrews (1980) to suggest that there was a need for the establishment of clear objectives in entrepreneurial organisations, their units, and among the individuals comprising those units. In his view, movement in a chosen direction was brought about through the establishment of clear goals. Thus, individual organisa- tions and the managers of those organisations were able to take control of their own future through the type of activities outlined by Hax and Majluk (1991). That is, through the development of a series of coherently unified decisions, programs of long-range action in- corporating priorities and resource allocation, decision- making patterns that lead the organisation to a definition of their business portfolio, actions that aim at guaranteeing the sustainability of business, a vision that engages the whole organisation in collective effort and a set of economic or non-economic contributions that the firm intends to offer its stakeholders. This world view places the management of an organisation at centre stage, defining strategy and affecting events. This view, however, is not necessarily ARTICLE IN PRESS *Corresponding author. Tel.: +44-2870-324-166. E-mail addresses: mamierca@warp.com.br (M. Tanabe), cfa@usp.br (C. Felisoni De Angelo), n.alexander@ulst.ac.uk (N. Alexander). 0969-6989/03/$-see front matter r 2003 Elsevier Science Ltd. All rights reserved. doi:10.1016/S0969-6989(02)00064-4