Strategic groups: Firm structure, industry diversification, and performance determinants

Strategic group theory provides an important organizing tool for understanding a firm's strategic options and their implementation. The use of strategic group theory allows for comparison of companies as strategic actors not only on the basis of performance but also on the degree of structural...

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Bibliographic Details
Published in:American business review 1996-01, Vol.14 (1), p.73
Main Authors: Tucci, Jack E, Sweo, Robert
Format: Article
Language:English
Subjects:
Corporate reorganization
Downsizing
Economic theory
Strategic planning
Studies
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Summary:Strategic group theory provides an important organizing tool for understanding a firm's strategic options and their implementation. The use of strategic group theory allows for comparison of companies as strategic actors not only on the basis of performance but also on the degree of structural adaptation. Most current research on strategic groups is focused on growing industries, however. Even as the economy as a whole expands, many industries in the US are continuing to experience the trauma of downsizing. The effort by companies to obtain the low cost leadership position through asset parsimony has challenged the status quo. This change in strategy combined with the maturing of many industries will continue to force many companies to downsize. Critical to understanding the effect of downsizing is the development of an adequate structure-performance model that links past performance research with firm's structural component studies. Firms are compared on the micro-level to extend previous research on strategic groupings.
ISSN:0743-2348