Strategic groups in international competition

Abstract

By focusing on important dimensions for identifying strategic groups, companies can improve their understanding of the competitive environment. But which are the crucial strategic dimensions when it comes to classifying competitors, in light of the fact that uncertainty is inherent in any assessment of competitors' business strategies? This article presents an empirical study that seeks to throw fresh light on the concept of the strategic group. Four key dimensions are proposed for grouping competitors according to their business strategies. Thus, competitors could be classified according to the breadth of their market scope and the degree of adaptation to individual customers. Product quality and pricing can also be used as dimensions in identifying strategic groups. These dimensions apply primarily to analyses in the electrotechnical industry. The sample comprises 44 Swedish electrotechnical companies. Twenty-four of these compete on the Swedish market and 20 on the U.S. market. Mail questionnaires were used to collect cross-sectional quantitative data about the competitor perceptions of the company presidents. Analysis of the data reveals slight differences only between perceptions in Sweden and the U.S. Correlations among variables have also been calculated and underlying factors have been distinguished. These factors constitute the dimensions for classifying competitors. The resulting strategic dimensions are applied to a mapping of strategic groups of competitors on the Swedish and U.S. industrial robot markets.