Strategic group theory:review, examination and application in the UK pharmaceutical industry

Purpose – The purpose of this paper is to consider the current status of strategic group theory in the light of developments over the last three decades. and then to discuss the continuing value of the concept, both to strategic management research and practising managers. Design/methodology/approach – Critical review of the idea of strategic groups together with a practical strategic mapping illustration. Findings – Strategic group theory still provides a useful approach for management research, which allows a detailed appraisal and comparison of company strategies within an industry. Research limitations/ implications – Strategic group research would undoubtedly benefit from more directly comparable, industry-specific studies, with a more careful focus on variable selection and the statistical methods used for validation. Future studies should aim to build sets of industry specific variables that describe strategic choice within that industry. The statistical methods used to identify strategic groupings need to be robust to ensure that strategic groups are not solely an artefact of method. Practical implications – The paper looks specifically at an application of strategic group theory in the UK pharmaceutical industry. The practical benefits of strategic groups as a classification system and of strategic mapping as a strategy development and analysis tool are discussed. Originality/value – The review of strategic group theory alongside alternative taxonomies and application of the concept to the UK pharmaceutical industry.

“Entrepreneurial management” as a strategic choice in firm behavior : linking it with performance

Establishing the core principals of “entrepreneurial management” within an organization describes a certain strategic choice that affects a company in six dimensions, according to Stevenson (1983). Our aim is to empirically measure entrepreneurial management (it’s existence and degree) and to link this measured strategic choice (for or against) entrepreneurial management with firm performance. Our argument here is that companies that follow core principals of entrepreneurial management should outperform other more administrative firms in certain measures of strategic performance. This paper builds on an empirical investigation published by Brown, Davidson & Wiklund (2001), who have developed and tested a reliable measurement instrument for Stevenson’s definition of “entrepreneurial management” (Stevenson 1983, Stevenson & Jarillo 1990). In the first part of our paper we aim to replicate and to some extent improve this study. In the second part we link the measured degree of “entrepreneurial management” with firm performance. To our knowledge, even so Stevenson’s definition of entrepreneurial management is commonly acknowledged and Brown et al. (2001) developed a reliable instrument to empirically capture this behavioral approach to management, the construct of entrepreneurial management never before has been linked to firm performance in an empirical study. Since most papers on corporate entrepreneurship and firm performance are based on Covin & Slevin’s (1991) or Miller’s (1983) concept of entrepreneurial orientation, we contribute to the literature on corporate entrepreneurship in a novel way, given the fact that the entrepreneurial management dimensions measured in our study can theoretically and empirically be clearly distinguished from the construct of entrepreneurial orientation as defined by Covin & Selvin (1991).

Population Ethics, Social Choice Theory, and Two problems in the Measurement of Economic Poverty

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Contingencia, voluntarismo y strategic choice: un análisis teórico de sus enfoques sobre el entorno y el diseño de la organización

En la teoría de la organización existen diferentes perspectivas teóricas que abordan y explican el diseño de las organizaciones y su complejidad, entendiendo el impacto del entorno de manera diferente. El presente artículo de carácter teórico y sustentado en una rigurosa revisión bibliográfica, tiene como propósito principal analizar tres de esas perspectivas: contingencia, voluntarismo y strategic choice. Así, se mantiene la idea que si bien el enfoque contingente influye significativamente en el diseño y características de la organización considerando principalmente los factores del entorno, existen otros factores condicionantes-intrínsecos atribuibles a sus miembros –gerentes y directivos– que también desempeñan un papel relevante en la determinación de la forma como se crean las estrategias, se toman las decisiones y se realizan los diseños estructurales más adecuados para alcanzar los objetivos organizacionales. Por consiguiente y derivado de las presiones del ámbito interno como del  entorno a que están sometidas las organizaciones, tales perspectivas serán más útiles si las observamos como complementarias y no excluyentes a la hora de comprender y plantear soluciones a lo que sucede dentro y alrededor de las mismas

What determines religious school choice? Theory and evidence from rural Bangladesh

This paper looks at the determinants of school selection in rural Bangladesh, focusing on the choice between registered Islamic and non-religious schools. Using a unique dataset on secondary school-age children from rural Bangladesh, we find that madrasah enrolment falls as household income increases. At the same time, more religious households, and those that live further away from a non-religious school are more likely to send their children to madrasahs. However, in contrast to the theory, we find that Islamic school demand does not respond to the average quality of schools in the locality.

The EU as an Effective Trade Power? Strategic Choice of Judicial Candidates in the Context of the World Trade Organization

Drawing on the European Union (EU) foreign policy literature on effectiveness, this article studies how the European Union chooses judges to serve on the World Trade Organization’s key judicial institution: the Appellate Body. Conceptually, the article differentiates between effectiveness in representation and effectiveness in impact. The article shows how delegation to the European Commission has increased the strategic agenda-setting power for championing its preferred candidates. The article further compares European and US practice in nominating candidates. Overall, the article finds that effectiveness in representation has increased over time. In terms of effectiveness in impact, the article shows how the international environment conditions the EU’s influence. The article also exposes the difficulties of studying the effectiveness of EU external relations due to the peculiar decision-making processes dominant in judicial bodies.

Strengthening the strategic choice offered to the EU’s southern Mediterranean neighbours. CEPS Commentary, 1 February 2013

Finding that the European Neighbourhood Policy (ENP) currently lacks a strategic vision that would offer states in the southern Mediterranean substantial returns in exchange for making tough reforms, this CEPS Commentary suggests that this weakness can be overcome through a concrete prospect of regional integration pro-actively driven forward by the European Union. Taking inspiration from current projects such as the Energy Community Treaty, the authors urge the EU to explicitly incorporate “legally binding sectoral multilateralism” into the ENP. This would provide the Union’s partners with a tangible prospect of reaping real long-term benefits from EU cooperation and reinvigorate the ENP for the next decade.

An application of strategic group theory to the UK pharmaceuticals industry

Conducts a strategic group mapping exercise by analysing R&D investment, sales/marketing cost and leadership information pertaining to the pharmaceuticals industry. Explains that strategic group mapping assists companies in identifying their principal competitors, and hence supports strategic decision-making, and shows that, in the pharmaceutical industry, R&D spending, the cost of sales and marketing, i.e. detailing, and technological leadership are mobility barriers to companies moving between sectors. Illustrates, in bubble-chart format, strategic groups in the pharmaceutical industry, plotting detailing-costs against the scale of activity in therapeutic areas. Places companies into 12 groups, and profiles the strategy and market-position similarities of the companies in each group. Concludes with three questions for companies to ask when evaluating their own, and their competitors, strategies and returns, and suggests that strategy mapping can be carried out in other industries, provided mobility barriers are identified.