Strategic groups as subsets of strategic scope groups in the Belgian brewing industry

This research report proposes a distinction between strategic scope groups and strategic groups whereby strategic groups are delineated within strategic scope groups. A strategic scope group (SSG) includes firms within an industry that define their business using a four-dimensional ‘strategic space’ consisting of buyer types, product types, geographical reach and level of vertical integration, in a similar way. Within each SSG there may be several strategic groups (SGs). An SG includes firms within an SSG that deploy their resources in a similar way and that compete in the same way. While all firms within an SSG may compete against each other, firms within the same SG compete against each other in a similar way. Within the brewing industry in Belgium five SSGs could be identified. These SSGs differ statistically significantly on a risk-adjusted return on assets measure. SGs themselves did not differ on this performance measure. One may therefore conclude that mobility barriers between SSGs are higher than they are between SGs. © 1997 by John Wiley & Sons, Ltd.     

Strategic groups,competitive groups and performance within the U.K. pharmaceutical industry: Improving our understanding of the competitive process

Strategic group research originated in the 1970s and a number of notable studies centered on the U.S. pharmaceutical industry. Results were, however, conflicting. This paper explores the nature of strategic groups in the U.K. pharmaceutical industry. The study confirms the presence of between six and eight strategic groups across the period studied, 1998–2002. The study also demonstrates a statistically significant relationship between these strategic groups and performance using three performance measures. The paper then compares strategic groups with competitive groups and concludes that the distinction is important and may explain the contradictory findings in earlier strategic group research. Copyright © 2007 John Wiley & Sons, Ltd.     

Strategic groups and competitive enactment: a study of dynamic relationships between mental models and performance

This study used computer-assisted content analysis of more than four hundred presidents' letters to shareholders to examine empirical linkages between cognitive strategic groups clustered by themes in the reports and strategic groups clustered by performance. We found these groups converged as predicted by the literature, and that mental models and performance are involved in a recursive process of competitive enactment which contributes to strategic group stability. Our research used inductively derived themes from the letters to structure a mental model widely shared in the pharmaceutical industry, and then employed thematic variations to find stable clusters of companies. These thematic clusters were triangulated with the strategic groups from a published study of the same industry, in the same period, and were shown to converge. Additionally, longitudinal linkages between earlier mental models of strategic goals and later reports of performance were found. The findings of our large-scale empirical study support strategic group theory, demonstrate a novel approach to data mining, and pose questions for future research. Copyright © 2001 John Wiley & Sons, Ltd.     

Strategic schemas,strategic flexibility,and firm performance: the moderating role of industry clockspeed

We examine the moderating effect of industry clockspeed on the relationship between strategic schemas, strategic flexibility and firm performance. We employ two key properties of strategic schemas: complexity and focus. Using a sample of 225 firms from 14 industries, we show that the pattern of relationships among the theoretical constructs is different in fast‐ and slow‐clockspeed industries. The results suggest that complexity of strategic schemas promotes strategic flexibility and success in fast clockspeed industries, whereas focus of strategic schemas fosters strategic persistence, which is effective in slow‐clockspeed industries. Copyright © 2007 John Wiley & Sons, Ltd.     

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to ‘shocks’ in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms. Copyright © 2002 John Wiley & Sons, Ltd.     

Nested identities as cognitive drivers of strategy

Research Summary: Organizations face tensions to conform to industry norms for legitimacy yet differentiate for competitive advantage when implementing strategies. We suggest this tension is due to and resolved through organizations’ cognitive negotiations of multiple levels of identity. Through an inductive study in the recreational vehicle industry, we find that organizations concurrently draw on identities at the organizational, industry, and strategic group levels to formulate and enact specific competitive actions. Specifically, we find that organizational identity relates to decisions on product offerings; industry identity relates to downstream strategy; and strategic group identity relates to upstream strategy, firm boundaries, and expansion mode. Our findings highlight the importance of strategic group identity and inform a grounded model describing how organizations draw upon different levels of identity to influence strategy. Managerial Summary: Many managers experience tensions of differentiating their firms’ competitive actions from rivals, while conforming with industry norms and practices. In this article, we argue that a manager can navigate these tensions by understanding their firm, strategic group, and industry identities and how these identities interrelate. Through a qualitative case study of the U.S. recreational vehicle industry, we show that each level of identity influences different competitive actions, with firm identity connected to product offerings, industry identity related to managing downstream distribution, and strategic group identity related to firm boundary and acquisition strategies. Overall, strategic group identity is the most critical for managers as this level filters how they view competitors and provides the rules of competition.     

Firm and industry effects within strategic management: an empirical examination

This study brings out the complementarities between resource-based and industrial organization schools within strategic management through an empirical examination of firm and industry effects. A variance component analysis of 264 single-business companies from 69 industries using 5- and 15-year periods suggests that firm effects are more important than industry effects on firm performance, but not on core strategies such as technology and marketing. The findings also point to the need to study core strategies at lower levels of aggregation to understand the sources of competitive advantage. © 1998 John Wiley & Sons, Ltd.     

Strategic groups: A cognitive perspective

The strategic group concept provides an attractive middle ground between firm and industry for both theory development and empirical analysis. To date, this concept has been defined by researchers in terms of secondary accounting and financial data, and a number of critics have questioned the validity of this work. Our research shows that industry participants share perceptions about strategic commonalities among firms, and that participants cluster competitors in subtle ways not reflected in extant academic research on strategic groups. Decision makers' perceptions and cognitions are phenomena that can be expected to influence industry evolution. They are of research interest as an additional source of data on firm commonalities which helps address concerns about previous strategic group research.     

Firm,strategic group,and industry influences on performance

A long‐standing debate has focused on the extent to which different levels of analysis shape firm performance. The strategic group level has been largely excluded from this inquiry, despite evidence that group membership matters. In this study, we use hierarchical linear modeling to simultaneously estimate firm‐, strategic group‐, and industry‐level influences on short‐term and long‐term measures of performance. We assess the three levels' explanatory power using a sample of 1,165 firms in 12 industries with data from a 7‐year period. To enhance comparability to previous research, we also estimate the effects using the variance components and ANOVA methods relied on in past studies. To assess the robustness of strategic group effects, we examine both deductively and inductively defined groups. We found that all three levels are significantly associated with performance. The firm effect is the strongest, while the strategic group effect rivals and for some measures outweighs the industry effect. We also found that the levels have varying effects in relation to different performance measures, suggesting more complex relationships than depicted in previous studies. Copyright © 2007 John Wiley & Sons, Ltd.     

Strategic repertoire variety and new venture growth: The moderating effects of origin and industry dynamism

New ventures (companies eight years or younger) face an important choice in attempting to achieve growth: Should they follow “strategic simplicity” by relying on a few similar competitive actions, or emphasize “strategic variety” by implementing multiple different competitive actions? Data from 140 new ventures in Spain suggest that new ventures benefit from pursuing strategic variety, especially when their industries are highly dynamic. Further, although new ventures in general gain from strategic variety in highly dynamic industries, independently owned ventures achieve higher growth rates than their corporate counterparts. Copyright © 2013 John Wiley & Sons, Ltd.     

Strategic groups: Theory,research and taxonomy

This paper discusses the concept of strategic groups, focusing upon the importance of intra-industry strategic groupings in understanding differences across firms within an industry. The problems involved in identifying strategic groups within industries are examined through a comprehensive review of recent studies. It is demonstrated that much of the research has used surrogates for elements of a firm's strategic direction, e.g. vertical integration, product range, R & D expenditure, to suggest bases by which creative and sustainable groups are formed. The authors argue that certain theoretical concepts such as mobility barriers, isolating mechanisms and controllable variablesprovide much firmer bases for identifying strategic groups within industries. Thus, taxonomies for understanding the nature of strategic group formulation can be developed. Implications of the strategic group concept for such strategic issues as the structure-performance linkage, firm mobility, patterns of rivalry, industry evolutionand firm growthare then examined. The paper concludes by indicating fruitful directions for strategic group research in the context of the strategic management field.     

Performance implications of delayed competitive responses: evidence from the U.S. retail industry

The timing of competitive actions and responses is a key management concern that has important performance consequences. This study focuses on the timing and consequences of competitive responses. Theory predicts a negative linear relationship between response delay and responder performance mirrored by an opposing positive linear relationship between response delay and first mover performance. In contrast, our study suggests that response delay has a curvilinear relationship with responder performance, and a linear relationship with first mover performance. We test our propositions using retail industry data and discuss the implications. Copyright © 2008 John Wiley & Sons, Ltd.     

Asymmetric rivalry between strategic groups: response,speed of response and ex ante vs. ex post competitive interaction in the spanish bank deposit market

The objective of this study is to examine asymmetric rivalry between strategic groups in a given industry. Two research hypotheses argue for the existence of asymmetric rivalry in the sense that strategic groups of small companies have a greater degree of response but a slower speed of response to the actions of strategic groups of large companies, than vice versa. To test this, we use an ex post approach that examines the news releases published on the strategic actions and reactions of firms. A third hypothesis compares ex ante competitive expectations with ex post asymmetric rivalry between strategic groups. To test this, we compare ex post news on actions/reactions with an ex ante approach that estimates conjectural variations. The empirical application carried out on bank deposits in the Spanish market defines strategic groups in terms of size due to the historical and institutional conditions of the industry (deregulatory change). The results obtained show that rivalry patterns between strategic groups in terms of company size can be predicted as asymmetric in the sense that smaller bank strategic groups have a greater degree of response (Stackelberg ‘leader–follower’ competitive interaction), and a slower speed of response to the actions of larger bank strategic groups than is found the other way around. Moreover, ex ante expectations of aggressiveness on the part of larger strategic groups characterize greater ex post reactions from the smaller‐size strategic groups. Therefore, the size distribution of strategic groups is valuable to research on complex industries with deregulation changes. Copyright © 2005 John Wiley & Sons, Ltd.     

Conceptual maps of the leading MBA programs in the United States: core courses,concentration areas,and the ranking of the school

This paper captures the structure of MBA programs in 25 leading U.S. business schools at the beginning of the revolution these programs are undergoing. It is a study of strategic groups in the MBA industry, and a baseline for examining adaptation and strategic change in educational institutions. We use the Co‐plot method to map the schools according to the 1993 structure of their core courses and existing areas of concentration. The maps indicate similarities among business schools and shed light on their 1994 ranking. Each of the five top schools has been found to be in a different cluster of MBA program structures. The findings suggest that program structure content—the particular mix of core and concentration areas—in itself is not a source of superior performance. Copyright © 1999 John Wiley & Sons, Ltd.     

Services,industry evolution,and the competitive strategies of product firms

Services of different types have become increasingly important for product firms. While these firms mainly focus on products, managers and researchers lack a comprehensive framework to understand when to make significant investments in particular kinds of services. We identify three categories of product‐related services from a product firm—smoothing and adapting services, which complement products, and substitution services, which enable customers to pay for the use of a product without buying the product itself. We develop propositions about the relative level of these different kinds of services vis‐a‐vis industry evolution, as well as suggest how these services affect industry structure. We draw upon various literatures, though we conclude that the relationship between products and services is more complex and richer than any one literature suggests. Copyright © 2014 John Wiley & Sons, Ltd.     

Strategic human resource management,institutionalization, and employment modes: an empirical study in China

This study compares the predictions of institutional theory with those of the contingency perspective of strategic human resource management (SHRM) on the selection of an employment mode. Empirical data were collected from multinational enterprises, including the electronics and garment industries, that operate in China to test the relative importance of the determinants of the selection of an employment mode. The results provide greater support for the SHRM predictions than for the institutional theory predictions. The implications of the findings for researchers and practitioners are discussed. Copyright © 2007 John Wiley & Sons, Ltd.     

Management heterogeneity,competitive interaction groups,and firm performance

One of the fundamental problems in strategic management is to map a heterogeneous set of firms in an industry into subsets of firms within which firms are homogeneous in their conduct and performance. The strategic group concept provides an answer to this intriguing question. Researchers in strategic group theory argue that firms within the same strategic group are behaviorally similar and thus tend to compete more fiercely within the group than across groups. In this paper, we focus on the question whether firms within the same group show similar decision‐making characteristics. Strategic‐choice theorists argue that top management teams in firms have substantial discretion in determining the future strategic contour of firms. Upper‐echelon theorists also argue that top managers are the strategists who set the direction of firms and the pace of competition in the industry. Further, they argue that top management team characteristics are an important element that determines the market niche in which a firm competes and the strategic direction a firm follows. Based on these arguments, we expect that there will be a significant link between grouping of firms by the patterns of competitive interactions and grouping of firms by top management team heterogeneity. Moreover, we argue that the closer the TMT heterogeneity of a firm is to the dominant heterogeneity in the competitive interaction group, the better it performs. Copyright © 2000 John Wiley & Sons, Ltd.     

Performance Differences in German Higher Education: Empirical Analysis of Strategic Groups

Initial investments and different strategic actions of universities lead to their different positions in the higher education sector. Pursuing similar strategies leads to similar positions that influence structure and performance within the system. Institutions cannot only choose to focus on research or on teaching, but also to focus either on natural sciences or social sciences. Using 73 public universities in Germany, this paper examines the existence of strategic groups based on performance. Common strategic variables only partly determine performance in high and low efficiency groups.     

Research notes and communications management and organizational change: A note on the railroad industry

Hypotheses which relate top-level managers' age, years of company and industry service, and education to strategic change are studied with a sample of 855 managers from 27 railroads. Results generally support hypotheses that younger managers and those with less experience are more likely to alter their strategies with changing environmental conditions.     

Strategic human capital management in the context of cross‐industry and within‐industry mobility frictions

Research Summary: We develop and test a theory examining how frictions that restrict mobility across industries and frictions constraining mobility within an industry can co‐occur to effectively isolate individual human capital, ultimately changing the firm's make‐versus‐buy decision for human capital. Empirically, we demonstrate that when cross‐industry frictions in the form of limited skill transferability and within‐industry frictions in the form of noncompete enforceability are both present, employees exhibit longer tenures, firms hire workers with less initial experience, firms change the amount and nature of training provided, and wages marginally increase. These findings suggest that sufficiently strong and complementary mobility frictions shift the emphasis of firms’ human capital management practices toward internal development of human capital relative to acquisition on the external market. Managerial Summary : In the face of frictions to employee mobility both within and across industries, which we capture empirically using measures of noncompete enforceability and limited skill transferability across industries, firms tend to hire less experienced workers, such workers exhibit longer tenures, and firms invest more in their training, particularly in the development of new skills. Our findings imply that for firms operating under such complementary frictions, better hiring and internal development capabilities are particularly important for performance, while those firms without such capabilities may benefit from considering ways to circumvent the mobility frictions, including moving out of the focal state or lobbying for different noncompete laws.