Firm Diversity Within Strategy Types: Substrategies And Performance Effects

Abstract

Competitive strategy types are widely used to evaluate competitive advantage. The assumption is that member firms are extremely similar, even homogeneous. However, empirical evidence from group membership effects is mixed; it highlights a need for further refinement in strategy classification. This study relies on substrategies to group firms in the middle range between strategy types and individual firms. With data from 125 business units, we investigate variation in substrategies within strategy type and performance effects. Firms pursue different substrategies within competitive strategy types, but no individual substrategy produces superior performance.