The Organizational Ecology of Strategic Groups in the American Brewing Industry from 1975 to 1990

Abstract

Attempting to resolve the impasse in research on performance differences among strategic groups of firms, we propose the use of ideas and models from organizational ecology. We demonstrate the potential of such and approach by applying ecological models to study the three organizational forms found in the modern American brewing industry—the mass producer, the microbrewery and the brewpub. The analysis covers the period from 1975 to 1990 and examines the life histories of 253 breweries. The findings support the use of an ecological model of resource-partitioning and of organization form-specific models of density. Specifically, we find that: (1) founding rates of microbreweries and brewpubs increase with density and then decline; (2) mortality rates of brewpubs decline with density; (3) mortality rates of microbreweries decline with industry concentration: and (4) mortality rates of mass production breweries are highest for intermediate size firms. In general, the analysis yields new insight into the dynamics of the rapidly changing American brewing industry and its strategic groups.