STRATEGIC GROUP FORMATION AND STRATEGIC GROUP SHIFTS. A LONGITUDINAL ANALYSIS OF THE U.S. PHARMACEUTICAL INDUSTRY, 1963-1982 (COMPETITION, PERFORMANCE; UNITED STATES)
Abstract
To examine the importance of the strategic group concept to the Strategic Management of firms, the following research questions were addressed in the context of the U.S. pharmaceutical industry for the period 1963-1982: (1) What is "strategic" about strategic groups? (2) Do strategic groups generically characterize competition? (3) Do strategic groups have different performance characteristics? (4) Do strategic group members realize similar performance? and (5) Do strategic groups have different performance determinants? Strategic group membership was defined in terms of similarity of strategic scope and resource deployment commitments. Performance differences were gauged with respect to one profitability and two market share measures and was expressed in terms of levels of performance, risk, and risk-adjusted performance. The major findings of this study are: (1) The strategic asymmetry among strategic groups changed over time. Some strategic groups were more stable than others and a large number of membership changes occurred. Overall, the strategic group structure changed dramatically over time; (2) Strategic groups had different levels of performance, but similar risk and risk-adjusted performance. Generally, strategic groups with differentiation strategies outperformed groups with focused strategies; (3) Strategic group members had different levels of performance, risk, and risk-adjusted performance. Additional analysis indicated that performance and risk are generally positively correlated. (4) Strategic groups had different performance relationships: similar strategic actions and environmental changes had different pay-offs for different strategic groups. The major contributions of this study are the development of a more elaborate theoretical framework for strategic group analysis, the detailed measurement and longitudinal analysis of strategy, and the development of more qualified insights into strategy-performance relationships.
Degree
Ph.D.
Subject Area
Management
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