To read the full version of this content please select one of the options below:

Positioning decisions within strategic groups : The influences of strategic distance, diversification and media visibility

Xiao Duan (Department of Innovation, Entrepreneurship and Strategy, School of Economics and Management, Tsinghua University, Beijing, China)
Zhan-ming Jin (Department of Innovation, Entrepreneurship and Strategy, School of Economics and Management, Tsinghua University, Beijing, China)

Management Decision

ISSN: 0025-1747

Publication date: 11 November 2014

Abstract

Purpose

Strategic group has been intensively studied since this term emerged in 1970s, but previous studies have been limited to the comparisons between groups such as performance comparison. The purpose of this paper is to explore the internal structure of strategic groups by examining the effect of strategic distance from a firm to the center of its strategic group on firm performance.

Design/methodology/approach

The research is based on data acquired from the annual reports of listed companies and some Chinese domestic databases, including CSMAR Solution, WIND financial database, and China Core Newspapers Full-text Database. After grouping listed pharmaceutical companies in China over the period 2010-2011, the authors test three hypotheses by using fixed effect regressions.

Findings

The paper finds that the strategic distance from a firm to the center of its strategic group has a significant negative effect on the firm's financial performance. Two factors are discovered to influence that effect: corporate diversification strengthens the negative effect of strategic distance on performance, while firm's media visibility weakens that negative effect.

Originality/value

The findings reveal the relationship between intra-group strategic positioning and firm performance, and specify how firms can gain competitive advantage through positioning choices and strategic actions. This study promotes the establishment of a more comprehensive strategic group theory by revealing the structure within strategic groups.

Keywords

Acknowledgements

This research is supported by National Natural Science Foundation of China (Grant No. 71172003). The authors would like to thank the anonymous reviewers for their valuable suggestions.

Citation

Duan, X. and Jin, Z.-m. (2014), "Positioning decisions within strategic groups : The influences of strategic distance, diversification and media visibility", Management Decision, Vol. 52 No. 10, pp. 1858-1887. https://doi.org/10.1108/MD-08-2013-0415

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited