The application of strategic group theory in strategic management research stems from an observation by Hunt (1972). Hunt coined the term “strategic groups” to describe “a group of firms within the industry that are highly symmetric with respect to cost structure, the degree of vertical integration, and the degree of product differentiation, formal organization, control systems, management rewards/punishments, and the personal views and preferences for various possible outcomes” (Hunt, 1972, p. 8). Since then the most commonly used definition of strategic groups has been that provided by Porter: “A strategic group is the group of firms in an industry following the same or a similar strategy along the strategic dimensions” (Porter, 1980, p. 129). Porter extended Hunt’s original idea to include indirect effects leading to different strategies between firms, notably the existence of market entry barriers. (Porter, 1976; Porter, 1979). A further definition is that provided by Cool, who described a strategic group as “a set of firms competing within an industry on the basis of similar combinations of scope and resource commitments” (Cool and Schendel, 1987). The implication is that firms in a strategic group competes adopting similar strategies and resources, leading to intra-industry segmentation.
In terms of analysis, the strategic group can be viewed as a middle ground between the industry and the firm (Porter, 1980; Oster, 1994). Thus, the idea of strategic groups enriched the industrial organization perspective and provided a convenient taxonomy for strategic management researchers to compare and contrast groups of