Dynamic Strategic Groups: Deriving Spatial Evolutionary Paths

Strategic Management Journal, Volume 30, Issue 13, pages 1420–1439

Posted: 17 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

Rui Wang

Peking University

Date Written: 2009

Abstract

Recent theoretical developments in the domain of strategic groups, specifically those related to cognitive groups and strategic group identity, seem to suggest that strategic group membership is likely to be relatively stable over time and that firms in a strategic group co-evolve. Yet appropriate data analytic approaches that use information about firms over time to identify stable strategic groups and their evolutionary paths have been lacking. To overcome such limitations, this research proposes a new clusterwise bilinear multidimensional scaling model that can simultaneously identify (1) the number of strategic groups, (2) the dimensions on which the strategic groups are based, and (3) the evolution of the strategy of these groups over time. Our discussion encompasses various alternative model specifications, together with model selection heuristics based on statistical information criteria. An illustration of the proposed methodology using data pertaining to strategic variables for a sample of public banks in the tristate area of New York, Ohio, and Pennsylvania across three time periods (1995, 1999, and 2003) identifies two underlying dimensions with five strategic groups that display very different evolutionary paths over time. Post hoc analysis shows pronounced differences in firm performance across the five derived strategic groups. This article concludes with a discussion of the implications of the findings, as well as potential future research directions. John Wiley & Sons, Ltd. Copyright © 2009 John Wiley & Sons, Ltd.

Keywords: strategic groups, evolutionary paths, clusterwise analyses, bilinear spatial models, multidimensional scaling, dynamic analyses

Suggested Citation

DeSarbo, Wayne S. and Grewal, Rajdeep and Wang, Rui, Dynamic Strategic Groups: Deriving Spatial Evolutionary Paths (2009). Strategic Management Journal, Volume 30, Issue 13, pages 1420–1439, Available at SSRN: https://ssrn.com/abstract=2796239

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

Rui Wang

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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