Strategic groups based on marginal rates: An application to the Spanish banking industry

Abstract

This paper uses Data Envelopment Analysis (DEA) to identify strategic groups (SGs) in the Spanish banking industry. The concept of SG relies on the fact that firms grouped together value inputs and outputs in the same way. As such, they take identical direction when, due to external influences, changes are required. Weights obtained from DEA are extremely useful in the valuation of inputs and outputs. Specifically, by comparing DEA weights pair-wise, i.e. quantifying the variablesÕ marginal rates (MR), we can obtain a very good representation of the existent trade-off and the relative importance of the two variables.The paper uses MRs obtained through DEA models and, simultaneously, proposes feasible ways to overcome two usual problems with DEA virtual weights, namely: (1) the multiplicity of weights for efficient DMUs; and (2) the inexistence of dual variables for inefficient DMUs.From the empirical point of view, once the MRs are determined, the second stage is to perform Cluster Analysis. We apply Cluster Analysis in two ways: (1) on the basis of the MRs; and (2) following the traditional application by running Cluster Analysis with the original variables. The results obtained show the advantages of using MRs instead of the standard application of Cluster Analysis.Summing up, the concept of SG is reinforced if we use refined methods to determine the existence of SGs. The results of the application of DEA models to observe the presence of SG in the Spanish banking industry offer interesting views on it.

Multipoint competition, strategic similarity and entry into geographic markets

“…Finally, note that the measure is a firm-by-market measure as defined by Gimeno and Jeong (2001). Cool and Schendel (1987) propose, we distinguish between scope and resource commitments to construct a measure of average strategic similarity between potential entrant i and incumbents in market n. Accordingly, we select a set of six variables capturing potential entrant's scope and resource commitments (Mehra, 1996;Prior and Surroca, 2006). In the scope dimension we take into account three variables: (1) credits/financial investments;…”

Ventajas competitivas de las empresas de telefonía móvil en América Latina. Análisis desde la perspectiva de los grupos estratégicos

“…La investigación que se ha hecho sobre los grupos estratégicos manifiesta en su mayoría cierto consenso acerca de su existencia y relevancia, ya que los directivos de empresa apoyan en ellos parte de sus decisiones (Nath y Gruca, 1997;Peteraf y Shanley, 1997;García et al, 2001;Hervàs et al, 2004;Zúñiga et al, 2004;Prior y Surroca, 2006;Leask y Parker, 2007;Pereira et al, 2011). No obstante, algunos investigadores han cuestionado la credibilidad, validez y utilidad del concepto de grupo estratégico, argumentando que los grupos no cuentan con una existencia real sino que se reducen simplemente a una conveniencia analítica de los investigadores (Hatten y Hatten, 1987;Barney y Hoskisson, 1990;Dranove et al, 1998).…”

“…Para formular la primera hipótesis de investigación de nuestro trabajo hemos partido, en primer lugar, de la definición de grupos estratégicos propuesta por Porter (1980), ya comentada en la Introducción de este trabajo. Además, hemos tenido en cuenta estudios de otros autores como Hunt (1972), Newman (1973), Caves y Porter (1977), Hatten y Schendel (1977), McGee y Thomas (1986), Cool y Schendel (1987), Thomas y Venkatraman (1988), Lewis y Thomas (1990), Bresser et al (1994, Olusoga et al (1995), Ketchen y Shook (1996), Peteraf y Shanley (1997), Nair y Kotha (2001), Osborne et al (2001), González Fidalgo y Ventura-Victoria (2002), Castle (2003), McNamara et al (2003), Hervàs et al (2004, Ketchen et al (2004), Warning (2004), Zúñiga et al (2004), Mas-Ruiz et al (2005), Prior y Surroca (2006), Leask y Parker (2007), Short et al (2007), Desarbo y Grewal (2008), Dikmen et al (2009), Chou (2011), Pereira et al (2011), Stouten et al (2011) y Dornier et al (2012, entre otros.…”

Strategic Efficiency. An Example using Data Envelopment Analysis in the Spanish Ceramic Tiles Industry.

“…DEA has been used as a technique for identifying strategic groups previously in works such as Day et al [6] [5], in an application to the brewing industry in the United States, or that of Prior and Surroca [12] [13], for the Spanish banking sector.…”