The Simultaneous Identification of Strategic/Performance Groups and Underlying Dimensions for Assessing an Industry's Competitive Structure

Journal of Modelling in Management, Volume 3, Issue 3, pp. 220-248

Posted: 15 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

Heungsun Hwang

McGill University

Qiong Wang

University of Oklahoma - Division of Marketing

Date Written: 2008

Abstract

Purpose: The purpose of this paper is to integrate aspects of the literature on strategic and performance groups and explicitly derive strategic/performance groups which exhibit differences with respect to both strategy and performance, as well as display associations and potential interrelationships between the two sets of variables.

Design/methodology/approach: A two‐way clusterwise bilinear spatial model was formulated (e.g. a scalar products or vector multidimensional scaling model (MDS)) for the analysis of two‐way strategic and performance data which simultaneously performs MDS and cluster analysis. An efficient alternating least‐squares procedure was devised that estimates conditionally globally optimum estimates of the model parameters within each iterate in analytic, closed‐form expressions.

Findings: This bilinear MDS methodology was deployed in the context of strategic/performance group estimation using archival data for public banks in the NY‐NJ‐PA tri‐state area. For this illustration, four strategic/performance groups and two underlying dimensions were found.

Practical implications: Consideration of both strategy and performance data should be employed in describing the heterogeneity among firms competing in the same industry.

Originality/value: The paper provides a new spatial methodology to derive strategic/performance groups in any given industry to more completely summarize intra‐industry heterogeneity.

Keywords: Strategic groups, Organizational structures, Cluster analysis, Competitive strategy, Banking

Suggested Citation

DeSarbo, Wayne S. and Grewal, Rajdeep and Hwang, Heungsun and Wang, Qiong, The Simultaneous Identification of Strategic/Performance Groups and Underlying Dimensions for Assessing an Industry's Competitive Structure (2008). Journal of Modelling in Management, Volume 3, Issue 3, pp. 220-248, Available at SSRN: https://ssrn.com/abstract=2795746

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

Heungsun Hwang

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

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)

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