Strategic group theory: review, examination and application in the UK pharmaceutical industry

Purpose

– The purpose of this paper is to consider the current status of strategic group theory in the light of developments over the last three decades. and then to discuss the continuing value of the concept, both to strategic management research and practising managers.

Design/methodology/approach

– Critical review of the idea of strategic groups together with a practical strategic mapping illustration.

Findings

– Strategic group theory still provides a useful approach for management research, which allows a detailed appraisal and comparison of company strategies within an industry.

Research limitations/implications

– Strategic group research would undoubtedly benefit from more directly comparable, industry‐specific studies, with a more careful focus on variable selection and the statistical methods used for validation. Future studies should aim to build sets of industry specific variables that describe strategic choice within that industry. The statistical methods used to identify strategic groupings need to be robust to ensure that strategic groups are not solely an artefact of method.

Practical implications

– The paper looks specifically at an application of strategic group theory in the UK pharmaceutical industry. The practical benefits of strategic groups as a classification system and of strategic mapping as a strategy development and analysis tool are discussed.

Originality/value

– The review of strategic group theory alongside alternative taxonomies and application of the concept to the UK pharmaceutical industry.