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Book part
Publication date: 20 June 2005

Noël Houthoofd and Aimé Heene

The paper describes six major approaches within strategic groups research: the industrial organization perspective (the IO-view), the strategic choice perspective, the…

Abstract

The paper describes six major approaches within strategic groups research: the industrial organization perspective (the IO-view), the strategic choice perspective, the strategy types perspective, the cognitive perspective, the customer perspective, and the business definition perspective. The two most promising perspectives to make real advances in the strategic management discipline seem to be the cognitive view and the business definition perspective. The purpose of a grouping based on business definitions is to provide an insight, as objective as possible, of the industry’s substructure which also corroborates with the cognitive maps of the industry which the CEOs have in mind. From a practical point of view, the classification of firms in groups based on commonality in business definition (buyer scope, product scope, geographical scope and degree of vertical integration), allows managers to compare their own firms with comparable firms (the firms within the same group). The research concerning strategic groups in the Belgian beer brewing sector and the Belgian electrical wholesale sector is presented. The major problems within the strategic groups research are discussed.

Details

Competence Perspectives on Managing Interfirm Interactions
Type: Book
ISBN: 978-0-76231-169-9

Book part
Publication date: 31 December 2003

Jeremy C Short, Timothy B Palmer and David J Ketchen

The resource-based view of the firm and strategic groups research are two of the most investigated frameworks in strategic management. Historically, assumptions behind…

Abstract

The resource-based view of the firm and strategic groups research are two of the most investigated frameworks in strategic management. Historically, assumptions behind these two views have seemingly put them at odds. The resource-based view of the firm argues that sustained competitive advantage is best attained when firms have unique resources, while strategic groups research argues that a number of firms within the same industry can achieve sustained profitability with strategies that are similar to one another, but distinct from other industry members. The two views focus on different levels of analysis and each largely ignores the other’s focal level. Yet neither offers any propositions that are incompatible with the tenets of the other. Thus, conceptual integration that crosses levels of analysis is possible and potentially fruitful. Indeed, some strategic groups research has begun to bridge the gap between these two theories by suggesting that firm differences exist both within and between strategic groups. This article adopts a multi-level view by developing propositions concerning contingencies when firm differences, group processes, or both may lead to sustained competitive advantage. Implications for practitioners as well as suggestions for future theory building and empirical tests are also discussed.

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Multi-Level Issues in Organizational Behavior and Strategy
Type: Book
ISBN: 978-0-76231-039-5

Book part
Publication date: 19 July 2005

Mark Shanley and Margaret Peteraf

Research on strategic industry groups provides numerous examples of the tensions between theory and methodology in strategic management research. After an initial…

Abstract

Research on strategic industry groups provides numerous examples of the tensions between theory and methodology in strategic management research. After an initial explosion of largely non-theoretical, methods-driven studies led to mounting criticisms, researchers recognized the need for more theoretical guidance concerning the nature of groups and their potential influences on firm performance. This refocusing on theory has produced different research streams, each with its own methodological concerns. This chapter reviews these developments with the objective of understanding how researchers balance theory and methods in current research.

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Research Methodology in Strategy and Management
Type: Book
ISBN: 978-0-76231-208-5

Book part
Publication date: 29 August 2007

Jeremy C. Short

The resource-based view (RBV) of the firm focuses on how firm-level assets and capabilities influence firm performance. Scholars have noted the need for studies grounded…

Abstract

The resource-based view (RBV) of the firm focuses on how firm-level assets and capabilities influence firm performance. Scholars have noted the need for studies grounded in the RBV to account for the role of the strategic group level, but uncertainty remains about how to do so. Random coefficients modeling (RCM) provide an appropriate technique to integrate these two levels of analysis, but its use has been limited in strategic management research to date. I review research integrating firm and strategic group levels and provide a roadmap for future research seeking to integrate these two levels’ influences on firm performance, and use RCM to illustrate the effects of firm resources on performance under three depictions of the strategic group level culled from strategic management research. Findings suggest that interpretations about the efficacy of resources’ influence on performance vary considerably across methodological specification. Next, I use RCM to illustrate how strategic management researchers can further integrate the firm and group levels by demonstrating how variables at the group level of analysis may interact with firm-level characteristics. I conclude with suggestions for future research using RCM to integrate the strategic group into multilevel studies predicting firm performance.

Details

Research Methodology in Strategy and Management
Type: Book
ISBN: 978-0-7623-1404-1

Article
Publication date: 9 May 2022

Gabriel Penagos-Londoño, Felipe Ruiz-Moreno and Ricardo Sellers-Rubio

One of the main difficulties for wine managers is understanding and interpreting how some strategies and company behaviours could affect firms’ performance. This study…

Abstract

Purpose

One of the main difficulties for wine managers is understanding and interpreting how some strategies and company behaviours could affect firms’ performance. This study aims to contribute to improve these concerns by examining the evolution of the competitive wine industry structure over time using the strategic group membership dynamics approach.

Design/methodology/approach

This study empirically analyses a data set spanning the period 2004–2014 to identify the strategic groups in the Spanish wine industry and to model their evolution over time. A time inhomogeneous hidden Markov model (HMM) is used for this purpose.

Findings

Three strategic groups are identified: Young Makers, Quality Lovers and Major Players. Young Makers are small wineries that produce low-quality wines. They are not part of a collective brand – Protected Designation of Origin – and do not invest in marketing campaigns. Quality Lovers produce the highest quality wines but offer a narrow assortment. They invest modestly in advertising, and most of them belong to a Protected Designation of Origin. Major Players produce medium-quality wines, offer a wide assortment and invest heavily in advertising. The groups seem stable over time.

Practical implications

The results show that strategic group analysis can be used to identify and compare patterns of strategic activity within the wine industry, providing a better understanding of the competitive environment.

Originality/value

No previous studies have analysed the competitive structure of the Spanish wine industry. This study delineates the structure of this industry using strategic groups, which is supported by a valid econometric model. Therefore, from a theory base perspective, this study adds new evidence to the stream of research on strategic groups by investigating their evolution over time in the wine industry and the effect of strategic group membership on performance.

Details

International Journal of Wine Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1751-1062

Keywords

Article
Publication date: 1 November 2004

M Valle Santos Alvarez

Argues that researchers need to recognize the importance of the temporal factor in research on strategic groups, paying more attention to interdependencies between a…

Abstract

Argues that researchers need to recognize the importance of the temporal factor in research on strategic groups, paying more attention to interdependencies between a firm’s strategy and its surrounding environment.

Details

Management Research News, vol. 27 no. 11/12
Type: Research Article
ISSN: 0140-9174

Keywords

Article
Publication date: 1 February 1998

Carlos Flavián and Yolanda Polo

This paper analyses the global evolution experienced by the retail food sector in Spain, taken as a model of a Southern European country. A detailed study is made of the…

Abstract

This paper analyses the global evolution experienced by the retail food sector in Spain, taken as a model of a Southern European country. A detailed study is made of the main characteristics of the strategic behaviour patterns observed among the main firms operating in this sector during the period 1989‐1993. The tool employed to that end is strategic group analysis, developed within a dynamic perspective which allows us to test the structural stability of the identified strategic groups. Throughout the length of the study it is shown how the evolution experienced in the sector is concentrated in changes to the relative participation of previously existing trading formulas rather than in the appearance of completely new alternative strategies. In particular, attention is drawn to the decline in traditional establishments, the marked expansion of hypermarkets and the continuous strategic repositioning of large supermarkets.

Details

International Journal of Retail & Distribution Management, vol. 26 no. 1
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 18 April 2019

Gabriel Ignacio Penagos-Londoño and Felipe Ruiz-Moreno

The purpose of this paper is to characterize the situation in the Spanish banking industry through the identification of strategic groups based on a set of variables.

Abstract

Purpose

The purpose of this paper is to characterize the situation in the Spanish banking industry through the identification of strategic groups based on a set of variables.

Design/methodology/approach

To do so, the authors use a 13-year data set and a time inhomogeneous hidden Markov model (HMM) in which the time variable transition matrix captures institutions’ group switching behavior to identify these strategic groups. In fact, the authors consider a mixture model is the data generation process.

Findings

Two groups are identified. These groups are primarily characterized by size and other strategic variables. The probability of remaining in a group is generally high: 87.28 per cent for SG1 and 61.84 per cent for SG2. The probability of switching groups is low: 12.72 per cent probability of switching from SG1 to SG2 and 38.16 per cent probability of switching from SG2 to SG1. Banks in SG1 seem more stable over time; they have low levels of switching behavior and well-defined long-term behavior. Banks in SG2 seem to evolve in terms of group membership.

Originality/value

Using an inhomogeneous HMM with time-variable transition matrix, this paper allows for time-varying parameters in the distributions to analyze the evolution of strategic group membership in this industry to detect changes in group strategy, changes in membership and the stability of groups over time.

Details

Journal of Modelling in Management, vol. 14 no. 2
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 11 November 2014

Xiao Duan and Zhan-ming Jin

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…

1731

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.

Details

Management Decision, vol. 52 no. 10
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 1 September 1999

Francisco José Más Ruíz

The analysis of strategic groups has important implications for marketing in order to identify a firm’s competitive position. Aims to analyse the development of the…

1262

Abstract

The analysis of strategic groups has important implications for marketing in order to identify a firm’s competitive position. Aims to analyse the development of the competence in an industry. Hypothesizes that the analysis of strategic groups is only meaningful when it is determined that the groupings obtained are not random events within a particular industry. Uses multivariate statistical tests to determine the stable sub‐periods, the strategic groups, and their dynamic characteristics over the years. Applies this technique to the Spanish banking sector and detects a relative intra‐industrial instability, and a significant change in the number and strategy of the identified groups with the passing of time.

Details

International Journal of Bank Marketing, vol. 17 no. 5
Type: Research Article
ISSN: 0265-2323

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