Strategic groups and performance: an empirical analysis of strategic groups in the wind energy industry in Europe

The strategic group theory provides an intermediate level of analysis between a single company and the whole industry for identifying issues about the company's competitive position and strategic choices. Strategic groups are companies within an industry with similar strategic characteristics or competing on similar bases. Strategic choices are aligned with the firms’ resources. The purpose of this study was to identify the strategic groups in the wind energy industry in Europe, and study, whether a certain group membership results in financial performance differences. Altogether 80 European wind energy companies were included in the study, which were clustered into four strategic groups according to their age and growth rate. Each group corresponds to a different strategy. The results show that the wind energy companies can be clustered according to the chosen strategic characteristics. Strategic decisions were investigated with characteristic variables. Performance variables were used in the analysis measuring profitability, liquidity and solvency of the groups. These strategic choices of the companies did not have a significant influence on the firms’ performance. The more mature and slower growing group proved to be the most successful. However, the differences between groups were generally not statistically significant. The only statistically significant difference found was in the solvency ratio between Mature Slow and Young Rapid groups. Measured with these variables, more mature and slower growing companies performed better. Therefore, a certain strategic group membership results in performance differences.

Proximity, strategic groups and reputation: an exploratory study of reputation in higher education

This paper explores the idea that stakeholder proximity, that is, how much/little experience a stakeholder has with a focal organization, impacts the extent to which stakeholders rely on strategic group characteristics as an anchor when judging the reputation of higher education institutions. We synthesize theories from psychology (ie, cognitive categorization theory) and management (ie, strategic group theory) to explore how stakeholder proximity may influence the formation of organizational reputation. Specifically, we examine how the proximity of three key stakeholders (N=1,049; prospective students, parents of students and hiring managers of new graduates) influences the perceived strategic character and generalized favorability of three distinct groups of post-secondary institutions (research-intensive universities, teaching-intensive universities and career colleges). Our results suggest that high proximity stakeholders rely less on strategic group characteristics, while reputation at a strategic group level is suggested to have greater influence on stakeholders who have less direct experience of and low proximity to an organization. Interestingly, our findings reveal some consistent differences between perceptions of prospective students and hiring managers that pose important theoretical questions about the role and impact of direct experiences in the reputation-building process, while also suggesting that higher education institutions may benefit significantly from differentiated marketing strategies according to issues of proximity.

Asymmetric rivalry within and between strategic groups

Our study examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group-level effects, including switching costs and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. Small firms, on the other hand, expect to experience a small amount of retaliation from the group comprising large firms and no reaction from the other firms in their group. We estimate the effect of group-level strategic interactions on firm performance. Our analysis reveals that the rivalry behavior within and between groups is asymmetric, which supports the dominant-fringe relation between firms, as described in our hypothesis.

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.

Do strategic groups play a role in the SME financing process?

This exploratory paper, developing a conceptual model of owner-manager characteristics and access to finance, aims to investigate whether the concept of strategic groups plays a role in the process of small and medium-sized enterprises (SMEs) accessing finance. Strategic groups are groups of firms making similar patterns of investments in order to achieve their goals. This paper explores how strategic groups, which represent a classification of SMEs based upon their realised strategies, helps to provide an understanding of the success of SMEs in raising finance. The data, from a representative survey of 400 SMEs conducted by the Barclays Bank Telephone Research Unit, were subject to two-stage cluster analysis, thus codified into strategic groups using the natural rhythm of the data, rather than any subjective and value-laden categories being imposed by the authors. The findings show clear differentiation between strategic groups of SMEs, the characteristics of their owner-managers, and the financing strategies adopted. As such, the paper develops a novel typology of strategic groups of SMEs which, therefore, informs their financing strategies, as well as advising other stakeholders.

Strategic groups, cognitive groups and environmental change in the UK pharmaceutical industry

This chapter explores the relationship between changes in strategy and environmental pressures within the UK Pharmaceutical Industry during a ten- year period. Two stable strategic time periods (SSTPs) were identified each of five years duration. Within each time period seven strategic groups were found but 11 out of 29 firms (37.9%) changed strategic groups membership during the period studied. The break between these two SSTPs was found to coincide with a sharp increase in the substitution of branded pharmaceuticals by cheaper parallel imports. A significant relationship was found between firms that changed groups and both their continent of origin and nationality. Firms whose home markets are more vulnerable to substitution were more likely to switch strategic groups. © 2011 Nova Science Publishers, Inc. All rights reserved.

Integrating strategic groups and the resource based perspective:understanding the competitive process

Although the strategic group and resource based perspectives are frequently presented as mutually exclusive, we argue otherwise. The resource based view informs strategic group analysis through a firm's product or service portfolio by offering a richer perspective on strategy and an additional lens for competitive group interpretation. Products act as the locus and bedrock for corporate decisions and form the backbone upon which market strategies are constructed. A "corporate genome" analogy is presented to illustrate how this process occurs within the U.K. pharmaceutical industry. © 2005 Elsevier Ltd. All rights reserved.

An analysis of strategic paths through the decomposition of total factor productivity: the case of Spanish savings banks

The Spanish savings banks attracted quite a considerable amount of interest within the scientific arena, especially subsequent to the disappearance of the regulatory constraints during the second decade of the 1980s. Nonetheless, a lack of research identified with respect to mainstream paths given by strategic groups, and the analysis of the total factor productivity. Therefore, on the basis of the resource-based view of the firm and cluster analysis, we make use of changes in structure and performance ratios in order to identify the strategic groups extant in the sector. We attain a threeways division, which we link with different input-output specifications defining strategic paths. Consequently, on the basis of these three dissimilar approaches we compute and decompose a Hicks-Moorsteen total factor productivity index. Obtained results put forward an interesting interpretation under a multi-strategic approach, together with the setbacks of employing cluster analysis within a complex strategic environment. Moreover, we also propose an ex-post method of analysing the outcomes of the decomposed total factor productivity index that could be merged with non-traditional techniques of forming strategic groups, such as cognitive approaches.

Strategic groupsin the European energy industry

Strategisten ryhmien teoria tarjoaa mahdollisuuden keskitason analyysiin yritysten ja toimialan välillä yritysten kilpailullisen aseman tarkasteluun. Strategiset ryhmät ovat samalla toimialalla toimivia yrityksiä, joilla on samanlaiset strategiset ominaisuudet, jotka kilpailevat samanlaisilla perusteilla tai jotka toteuttavat samanlaista strategiaa. Tässä tutkimuksessa strategisten ryhmien teoriaa on käytetty eurooppalaisten energiayritysten ryhmittelyyn. Tutkimuksessa oli mukana 104 energia-alan yritystä, jotka jaettiin viiteen strategiseen pääryhmään yritysten maantieteellisen toiminta-alueen ja koon mukaan. Jokainen ryhmä edustaa erilaista strategiaa. Muita strategisia ominaisuuksia, joita ovat diversifikaatioaste, tuotantoteknologia ja omistusmuoto, käytettiin muodostamaan alaryhmiä edellisistä pääryhmistä. Muodostettuja strategisia ryhmiä käytettiin seuraavaksi suoristuskykyerojen tutkimiseen ryhmien välillä. Suorituskykyä kuvaaviksi muuttujiksi valittiin liikevoitto-%, koko pääoman tuottoaste, vakavaraisuus-% ja current ratio. Tulokset osoittavat, että energiayritykset voidaan jakaa ryhmiin valittujen strategisten ominaisuuksien perusteella. Nämä yritysten strategiset valinnat eivät vaikuta merkittävästi yritysten taloudelliseen suorituskykyyn valittujen suorituskykymuuttujien osalta. Monikansalliset jättiläisyritykset ovat suorituskyvyltään heikoimpia ja eurooppalaiset suuryritykset parhaita ryhmiä, mutta erot eivät ole tilastollisesti merkittäviä. Ainut merkittävä ero suorituskykymuuttujissa oli vakavaraisuudessa monikansallisten ja eurooppalaisten suurten yritysten välillä. Muut suorituskykymuuttujat eivät eronneet ryhmien välillä tilastollisesti merkittävästi. Tilastollisesti merkittäviä eroja ei löydetty myöskään alaryhmien välillä.

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.