Strategic Group Analysis in the Construction Industry

Abstract

The aim of strategic group analysis is to determine whether clusters of firms that have a similar strategic position exist within an industry or not. Findings of strategic group analysis may further be used to investigate the performance implications of strategic group membership. The objective of this paper is to identify the possible strategic groups that could exist within the Turkish construction industry by using a theoretical framework applicable for the construction industry and alternative statistical cluster analysis techniques. The achieved results pinpoint the existence of three clusters and significant differences between the performances of firms in each cluster. All of the firms in the strategic group that have the highest average performance utilize a quality differentiation strategy and have the necessary resources and capabilities that give them the opportunity to differentiate their services from others. Also, they use a systematic approach and have a collaborative environment for strategic decision making. Findings of strategic group analysis can be used by professionals to understand the current strategic position of a firm within the competitive environment and formulate strategies to shift to a better performing cluster.