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Industry‐specific cycles and companies' financial performance comparison using self‐organizing maps

Aapo Länsiluoto (Turku School of Economics and Business Administration, Pori, Finland)
Tomas Eklund (Åbo Akademi University and Turku Centre for Computer Science, Turku, Finland)
Barbro Back (Åbo Akademi University, Turku, Finland)
Hannu Vanharanta (Tampere University of Technology, Pori, Finland)
Ari Visa (Tampere University of Technology, Tampere, Finland)

Benchmarking: An International Journal

ISSN: 1463-5771

Article publication date: 1 June 2004

Abstract

Multilevel environment analysis is important for companies operating on the global market. Previous studies have in general focused on one level at a time, but the need to perform multilevel environment analysis has also been stressed. Multilevel analysis can partly explain the benchmarking gap between companies, as changing conditions in the upper environment levels affect lower levels. In today's information‐rich era, it is difficult to conduct multilevel analysis without suitable computational tools. This paper illustrates how the self‐organizing map can be used for the simultaneous comparison of industry‐level changes and financial performance of pulp and paper companies. The study shows the importance of simultaneous analysis, as some simultaneous changes were found at both industry and corporate levels. Also found were some industry‐specific explanatory factors for good (Scandinavian companies) and poor (Japanese companies) financial performance. The results indicate that the self‐organizing map could be a suitable tool when the purpose is to visualize large masses of multilevel data from high‐dimensional databases.

Keywords

Citation

Länsiluoto, A., Eklund, T., Back, B., Vanharanta, H. and Visa, A. (2004), "Industry‐specific cycles and companies' financial performance comparison using self‐organizing maps", Benchmarking: An International Journal, Vol. 11 No. 3, pp. 267-286. https://doi.org/10.1108/14635770410538754

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited