Strategic Groups in the Korean Mobile Service Industry : The Identification of Mobility Barriers and Performance Differences

Strategic group, a cluster of firms with similar strategic behaviors, is a useful concept for explaining differences in firm performance in an industry. Mobility barriers are the obstacles preventing a strategic group member (firm) from migrating to other groups. The existence of mobility barriers is important for corporate management because it affects the formation of strategic groups and members' performance. This study identifies strategic groups in the Korean mobile service industry and tests the difference in performance across them. Recognizing mobility barriers formed by resources (spectrum) and technology (mobile service technology), we distinguish strategic groups of different forms, and explore stages of evolution of strategic groups. In addition, we perform comparative analysis of key indicators and a statistical test of the difference in performance across strategic groups. The analysis leads to the identification of strategic groups in the Korean mobile service industry and a finding of significant differences in performance across them. These results show that spectrum allocation and technology choice have a clear effect on the performance of telecommunication service providers. This suggests that the future introduction of a competition policy in the mobile service industry will need to take account of existing spectrum allocation policies and technology choice methods