Hybrid Strategy in Practice: Balancing Cost Efficiency, Differentiation, and Sustainability

Sammanfattning

This thesis examines how multinational corporations (MNC) implement hybrid competitive strategies and manage tensions between cost efficiency, differentiation, and sustainability. In increasingly complex and sustainability-driven markets, firms are no longer able to compete solely through low cost or differentiation but are increasingly required to combine both while responding to regulatory, stakeholder, and environmental pressures. With a focus on strategy implementation, organisational tensions, and sustainability integration, this research explores how firms operationalise hybrid competitive strategies in practice and how sustainability shapes this process. Using a qualitative multiple-case study of seven MNCs operating in the European retail, consumer goods, and food-related sectors, the study draws on semi-structured interviews, written questionnaire responses, and secondary corporate documents. The findings reveal that sustainability has become a strategic necessity rather than a peripheral corporate social responsibility (CSR) activity. However, its integration into competitive strategy creates persistent tensions, particularly between short-term cost efficiency and long-term value creation. Firms manage these tensions through organisational mechanisms such as governance systems, cross-functional coordination, supplier collaboration, strategic prioritisation, and the embedding of sustainability into operational processes. The analysis is framed by hybrid strategy theory, paradox theory, institutional theory, and perspectives on strategy implementation, offering a comprehensive lens for understanding how firms balance competing strategic priorities. This thesis contributes to the literature by showing that hybrid strategy implementation should not be understood as a fixed combination of cost leadership and differentiation, but as a continuous organisational balancing process. It also provides practical insights for managers seeking to integrate sustainability into competitive strategy while maintaining efficiency, differentiation, and long-term competitiveness.