Abstract
The focus of this paper is on three major questions: (1) what is the theoretical rationale for the strategic group concept?; (2) does strategic group membership have performance implications?; and (3) are strategic groups and membership in strategic groups stable characteristics of industries? A statistical procedure is proposed to longitudinally identify strategic groups. The empirical setting is the U.S. pharmaceutical industry over the period 1963–82. While performance differences are found in terms of market share, profitability differences between groups are not observed. Neither are differences found in terms of risk and risk-adjusted performance. These results are attributed to the existence of performance variation within each strategic group. A dynamic model of competitive repositioning is proposed which helps integrate the findings from the study.
Keywords
Profitability indexIndustrial organizationProfit impact of marketing strategyPharmaceutical industryStrategic managementGroup (periodic table)MarketingBusinessCompetitive advantageStrategic planningMarket shareOperations managementEconomicsStrategic financial managementFinanceBiotechnology
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Publication Info
- Year
- 1987
- Type
- article
- Volume
- 33
- Issue
- 9
- Pages
- 1102-1124
- Citations
- 532
- Access
- Closed
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Cite This
Karel Cool,
Dan Schendel
(1987).
Strategic Group Formation and Performance: The Case of the U.S. Pharmaceutical Industry, 1963–1982.
Management Science
, 33
(9)
, 1102-1124.
https://doi.org/10.1287/mnsc.33.9.1102
Identifiers
- DOI
- 10.1287/mnsc.33.9.1102