Strategy over the business cycle

This article develops an analytical and empirical framework for examining strategy over the business cycle. Firms were observed to adjust their strategies significantly and asymmetrically over business cycle stages. There was no consistency in performance between up markets and down markets. A variable‐parameter profitability model of strategy in a cyclical industry suggested the importance of a strategy's contemporaneous and inter‐temporal relationships with performance. Discrepancies were observed between actual strategies and optimal strategies over business cycle stages.