Product Market Heterogeneity, Resource Imitability and Sfrategic Group. Formation

This article blends the resource-based view of the firm with the industrial organization view of intraindustry heterogeneity to offer a theoretically grounded model of strategic group formation. The model provides an explanation for the inconsistent fkdings of empirical research on strategic groups and helps to situate future studies in this area. Competition is the central pillar of research in strategic management and, argu-ably, its most important concern. Consequently, differential competitive recipes and their related performance implications have been the object of strategy research since the beginning of the field. The concept of strategic groups, in particular, has received considerable attention as a useful framework for facilitat-ing the analysis of intraindustry competitive dynamics and performance variation. Sun Tzu’s common sense admonition that one must know one’s enemy as well as oneself (Sun Tzu, 1983) lends intuitive appeal to the notion of strategic groups. Information on strategic groups offers an industry-specific way for deci