This research examines the question of whether rivalry is greater betw
een or within strategic groups by utilizing more direct, dynamic and f
ine-grained measures of rivalry. Examining the competitive actions of
firms in different strategic groups to determine if competitive respon
ses were more likely to occur from firms in the same strategic group,
or from firms in different strategic groups, the research found that c
ompetitive responses cannot be predicted by strategic group membership
. Importantly, however, strategic group membership is a predictor of t
he manner by which firms compete with one another, or the frequency wi
th which they undertake competitive actions, cut prices, instigate war
fare and imitate rivals. (C) 1997 by John Wiley & Sons, Ltd.