Strategic capabilities, competitive strategy, and performance among retailers in Argentina, Peru and the United States

Purpose This paper aims to assess the influence of strategic capabilities on the business strategy‐performance relationship among retail businesses in Argentina, Peru, and the USA. Design/methodology/approach Zahra and Covin's self‐reported scale was amended and utilized to categorize businesses along Porter's typology. Strategic capability scales were adopted from DeSarbo and associates. Self‐reporting scales to assess relative competitive and objective performance in the present study were adopted from Ramanujam and Venkatraman. A survey containing these scales was administered to 277 attendees at a retail trade show in the USA. The survey – translated into Spanish – was distributed by mail and completed by 136 retailers in Peru and 163 retailers in Argentina. Findings Links were assessed among strategic capabilities, generic business strategies, and performance in retail businesses in Argentina, Peru and the USA. Support was found for links between the focus strategy and both marketing and linking capabilities, between the differentiation strategy and technology capabilities, and between the cost leadership strategy and management capabilities. The low cost‐differentiation combination strategy was associated with high performance in strategic groups whose businesses possess strong management and technology capabilities. These findings highlight the importance of developing strategy‐specific capabilities as a foundation for superior performance. Research limitations/implications This study relied on self‐reported assessments of competitive strategy, organizational capabilities, and performance. It utilized cluster analysis, assessed only retailers, and considered only three nations. Originality/value Extant strategic group research highlights the link between group membership and firm performance. The present study reinforces previous research. In addition, the presence of organization‐specific strategic capabilities helps to explain why some businesses outperform others in the same strategic group.