Strategic group
DESCRIPTION
Aset of firms within an industry that follow the same basic strategy or business model and have similar reactions to environmental changes.
Aset of firms within an industry that follow the same basic strategy or business model and have similar reactions to environmental changes.
KEY INSIGHTS
The number of groups within an industry and their composition depend on what dimensions are used to define the groups. Strategic groups are influenced by market entry barriers that deter a firm’s mobility in shifting its strategic position to diversification in new products, segments, or distribution channels. Mobility barriers define the strategic groups in that they reinforce patterns of rivalry among group members (Day and Wensley 1983). Strategic groups are influenced by the stability of mobility barriers and the ability of the firms in the group to resist the pressure on profits from direct competitors.
The number of groups within an industry and their composition depend on what dimensions are used to define the groups. Strategic groups are influenced by market entry barriers that deter a firm’s mobility in shifting its strategic position to diversification in new products, segments, or distribution channels. Mobility barriers define the strategic groups in that they reinforce patterns of rivalry among group members (Day and Wensley 1983). Strategic groups are influenced by the stability of mobility barriers and the ability of the firms in the group to resist the pressure on profits from direct competitors.
KEYWORDS Competitive analysis, industry structure
IMPLICATIONS
The membership and classification of strategic groups are not stable over time (Hatten and Hatten 1985). As such, in using the strategic group concept in evaluations of a firm’s strategic options, it is important to be clear about the theoretical and methodological grounds for the common strategies and mobility barriers in one’s industry.
The membership and classification of strategic groups are not stable over time (Hatten and Hatten 1985). As such, in using the strategic group concept in evaluations of a firm’s strategic options, it is important to be clear about the theoretical and methodological grounds for the common strategies and mobility barriers in one’s industry.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Dess, G. D., and Davis, P. S. (1984). ‘Porter’s (1980) Generic Strategies as Determinants of Strategic Group Membership and Organizational Performance,’ Academy of Management Studies, 27(3), 467–488.
Dess, G. D., and Davis, P. S. (1984). ‘Porter’s (1980) Generic Strategies as Determinants of Strategic Group Membership and Organizational Performance,’ Academy of Management Studies, 27(3), 467–488.
Cool, K., and Schendel, D. (1988). ‘Performance Differences among Strategic Group Members,’ Strategic Management Journal, 9(3), 207–223.
Conant, Jeffrey S., Mokwa, Michael P., and Varadarajan, P. Rajan (1990). ‘Strategic Types, Distinctive Marketing Competencies and Organizational Performance: A Multiple Measures-Based Study,’ Strategic Management Journal, 11(5), September, 365–383.
Marketing Research
Harrigan, K. R. (1985). ‘An Application of Clustering for Strategic Group Analysis,’ Strategic Management Journal, 6(1), 55–73.
Harrigan, K. R. (1985). ‘An Application of Clustering for Strategic Group Analysis,’ Strategic Management Journal, 6(1), 55–73.
Fiegenbaum, A., Sudharsan, D., and Thomas, H. (1987). ‘The Concept of Strategic Time Periods in Strategic Group Research,’ Managerial and Decision Economics, 8, 139–148.
Fiegenbaum, A., and Thomas, H. (1995). ‘Strategic Groups as Reference Groups: Theory, Modeling and Empirical Examination of Industry and Competitive Strategy,’ Strategic Management Journal, 13, 461–476.
BIBLIOGRAPHY
Day, George S., and Wensley, Robin (1983). ‘Marketing Theory with a Strategic Orientation,’ Journal of Marketing, 47(4), Autumn, 79–89.
Day, George S., and Wensley, Robin (1983). ‘Marketing Theory with a Strategic Orientation,’ Journal of Marketing, 47(4), Autumn, 79–89.
Hatten, K. J., and Hatten, M. L. (1985). ‘Some Empirical Insights for Strategic Marketers: The Case of Beer,’ in H. Thomas and D. M. Gardner (eds.), Strategic Marketing and Management. New York: John Wiley & Sons, Inc.