Hybrid Strategic Groups

Strategic Management Journal, Volume 29, Issue 3, pages 293–317, 2008

Posted: 11 Jun 2016

See all articles by Wayne S. DeSarbo

Wayne S. DeSarbo

Pennsylvania State University

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: March 2008

Abstract

The notion of strategic groups has recently emerged as a critical perspective for uncovering firms' strategic postures/recipes and competitive market structures. Firms within strategic groups generally adopt similar strategic recipes and compete more intensely than firms across strategic groups. Building on recent research, the authors develop the concept of hybrid strategic groups, which blend the strategic recipes of more than one group, in contrast to existing conceptualizations of strategic groups, where either firms tightly follow the recipes of a strategic group (i.e., core firms) or firms loosely follow the recipes of a strategic group (i.e., secondary firms). Thus, competition among firms depends not only on the strategic group but also on the overlap of that strategic group with other strategic groups. The authors devise a combinatorial optimization-based classification procedure utilizing a bilinear model that accommodates multiple variable batteries that can estimate hybrid strategic groups. The proposed methodology is illustrated by using archival data on public banks. For this illustration, the hybrid strategic group solution outperforms ordinary cluster analyses and offers critical insights into the nature of competition among firms.

Keywords: hybrid strategic groups, competitive strategy, competitive market structures, overlapping classification, banks and financial institutions, cluster analysis

Suggested Citation

DeSarbo, Wayne S. and Grewal, Rajdeep, Hybrid Strategic Groups (March 2008). Strategic Management Journal, Volume 29, Issue 3, pages 293–317, 2008, Available at SSRN: https://ssrn.com/abstract=2793507

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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