Strategic Groups: Evidence from Indian Industries

Abstract

This paper investigates the formation of strategic groups in Cement, Automobile and Information Technology firms from emerging markets like India. Based on data of 140 firms during 2005-2010, firm’s membership into different strategic groups is tested. Cluster analysis and one way ANOVA have been used to identify clusters and analyze statistically significant variables, which place a firm in one or other cluster. Except for the automobile industry, two clusters were formed in other industries. In the automobile industry, three clusters were formed. Different types of variables were responsible for cluster formation in different industries. This difference in significant variables is explained based on differences in industry growth rates and hence the demand- supply gap of products offered by firms belonging to different industries.

 Key words: Strategic groups, cluster analysis, India, cement, automobile, information technology