How much do strategic groups matter?

Abstract

One of the main statements of the Resource Based View of the firm contends that performance differences among firms are driven by heterogeneity in resources and capabilities. This paper proposes a framework that distinguishes three sources of competitiveness related to three levels of firm heterogeneity. Resource heterogeneity gives rise to industry competencies, strategy specific competencies and firm specific competencies. Using data from a Spanish survey we estimate the relative importance of these three sources of heterogeneity. We show that taking the group effect into account significantly alters our results from those obtained in previous research. We provide new evidence about the existence of a significant group effect and also an estimate of its relative importance vis a vis firm and industry effects.