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Strategic group analysis: strategic perspective, differentiation and performance in construction

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2008
Budayan, Cenk
The aim of strategic group analysis is to find out if clusters of firms that have a similar strategic position exist within an industry or not. In this thesis, by using a conceptual framework that reflects the strategic context, contents and process of construction companies and utilising alternative clustering methods such as traditional cluster analysis, self-organizing maps, and fuzzy C-means technique, a strategic group analysis was conducted for the Turkish construction industry. Results demonstrate that there are three strategic groups among which significant performance differences exist. Self-organising maps provide a visual representation of group composition and help identification of hybrid structures. Fuzzy C-means technique reveals the membership degrees of a firm to each strategic group. It is recommended that real strategic group structure can only be identified by using alternative cluster analysis methods. The positive effect of differentiation strategy on achieving competitive advantage is widely acknowledged in the literature and proved to be valid for the Turkish construction industry as a result of strategic group analysis. In this study, a framework is proposed to model the differentiation process in construction. The relationships between the modes and drivers of differentiation are analyzed by structural equation modeling. The results demonstrate that construction companies can either differentiate on quality or productivity. Project management related factors extensively influence productivity differentiation whereas they influence quality differentiation indirectly. Corporate management related factors only affect quality differentiation. Moreover, resources influence productivity differentiation directly whereas they have an indirect effect on quality differentiation.