This study examines the effects of selected dimensions of competitive strategy on the profitability of the Japanese and U.S. pharmaceutical companies. Competitive strategy explains a major portion of variations in firm performance in both countries. Firm size, advertising intensity, and capital intensity influence corporate financial profitability positively while debt leverage affects profitability negatively. Research and development (R&D) spending has no significant impact on profitability. Financial and organizational capabilities are important for success in a global high-technology industry.