Exploring Intra‐Industry Competitive Heterogeneity: The Identification of Latent Competitive Groups

Journal of Modelling in Management, Vol. 5 Iss: 2, pp.94 - 123

Posted: 17 Jun 2016

See all articles by Wayne S. DeSarbo

Wayne S. DeSarbo

Pennsylvania State University

Qiong Wang

University of Oklahoma - Division of Marketing

Simon J. Blanchard

Georgetown University - McDonough School of Business

Date Written: 2010

Abstract

Purpose – The paper aims to examine the nature of competition within an industry by proposing and examining three separate sources of competitive heterogeneity: the strategies that industry members use, the performance that they obtain, and how effectively the strategies are utilized to obtain such performance results.

Design/methodology/approach – To do so, a restricted latent structure finite mixture model is devised that can quantify the contribution of these three potential sources of heterogeneity in the formulation of latent competitive groups within an industry. The paper illustrate this modeling framework with respect to COMPUSTAT strategy and performance data collected for public banks in the USA.

Findings – The paper shows how traditional conceptualizations via strategic or performance groups are inadequate to fully represent intra‐industry heterogeneity.

Originality/value – This research paper proposes a new class of restricted finite mixture‐based models, which fit a variety of alternative forms/models of heterogeneity. Information heuristics are developed to indicate “best model.”

Keywords: Competitive strategy, Modelling, Public sector organizations, Banks, Economics, United States of America

Suggested Citation

DeSarbo, Wayne S. and Wang, Qiong and Blanchard, Simon J., Exploring Intra‐Industry Competitive Heterogeneity: The Identification of Latent Competitive Groups (2010). Journal of Modelling in Management, Vol. 5 Iss: 2, pp.94 - 123, Available at SSRN: https://ssrn.com/abstract=2796263

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Qiong Wang

University of Oklahoma - Division of Marketing ( email )

307 West Brooks
Price College of Business
Norman, OK OK 73019
United States
405-325-2668 (Phone)

Simon J. Blanchard

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

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