| dc.description | Executive Summary
The strategic group construct is a relatively new and useful tool for modeling and analyzing industries. The underlying premise of the construct is that companies within an industry are not necessarily homogeneous, but neither are all companies unique. Instead, groups of similar companies can be defined such that the groups are, in general, homogeneous within and heterogeneous between. Differences between groups of fim1s are thought to be the result of deliberate strategic decisions and thus reflect differences in strategic orientation. Strategic groups in this context can be defined as groups of companies that follow similar competitive strategies. The strategic group construct provides an important intermediate level for industry analyses. Studies of an industry as a whole may miss important intra-industry strategic differences, and company-level analyses may not generalize to the industry level. The importance of the strategic group construct lies, primarily, in the relationship of strategic groups to industry competition and performance. Strategic groups, if they exist Within an industry, clearly have implications for the patterns of competition. The complexity of the strategic group structure within an industry has a significant influence on economic performance and has been positively correlated with industry competitiveness. Strategic groups may also differ in their response to market opportunities and threats and in their profit potential. These relationships clearly suggest that the investigation of strategic groups within an industry can provide important and useful information.
This study seeks to improve the understanding of the Indian pharmaceutical industry through the modeling of competitive strategy among pharm firms. Strategic groupings were used as the basis of this model and as a framework, for the prediction of strategic change within the industry.
The study employed cluster analysis to group pharmaceutical firms. Cluster analysis revealed the presence of six major groups/ clusters in the firms. Five of these clusters had clear distinguishing characteristics whereas one cluster did not show any prominence in any of the clustering variables.
This might indicate that these firms do not pursue any active strategy at all. The other five clusters show clear trends such as cost leadership, export orientation, marketing focus, technology focus and lack of competence. The strategic options available to them have been investigated. | en_US |
