Rivalry within strategic groups and consequences for performance: the firm-size effects

Rivalry within strategic groups and consequences for performance: the firm-size effects

Article Type: Abstracts From: Strategic Direction, Volume 28, Issue 4

Mas-Ruiz F. and Ruiz-Moreno F.Strategic Management Journal, Dec 2011, Vol. 32 No. 12, Start page: 1286, No of pages: 23

Our study examines how, in a given industry, rivalry functions within strategic groups defined according to the size of their member firms and how this rivalry affects performance. We hypothesize that, owing to several forms of group-level effects including market power, efficiency, differentiation, and multimarket contact, strategic groups that comprise smaller firms will exhibit both increased rivalry and decreased performance compared with strategic groups that comprise larger firms. We test our hypotheses by estimating the effect of group-level strategic interactions (i.e. conjectural variations) on firm performance. Ultimately, our analysis of empirical data on loans in the Spanish banking industry demonstrates that increased rivalry and decreased performance indeed characterizes firms belonging to a strategic group that comprises smaller firms.Article type: Research paperISSN: 0143-2095Reference: 40AT215

Keywords: Banking, Organization Size, Performance, Strategic Groups, Within Group Rivalry