Research on strategic groups, which began in the 1970s, has been actively conducted in the fields of industrial organization and strategic management. However, despite a relatively large body of research, the theoretical foundation guiding the research has remained weak due to an overemphasis on data-processing-oriented empirical studies, resulting in insufficient accumulation of research findings. Accordingly, this paper critically examines existing strategic group research by dividing it into the two fields of industrial organization theory and strategic management theory, and discusses major issues related to strategic groups based on this examination. Existing studies suffer from numerous problems, including inconsistencies in the definition of strategic groups, arbitrariness in the selection of variables used to classify strategic groups, differences in the level of analysis regarding strategy, failure to consider the effects of mediating and moderating variables in examining the relationship between strategic groups and performance, and the problem of tautology. For strategic group research to advance further, the establishment of a theoretical foundation is a prerequisite, and to this end, the introduction of concepts such as mobility barriers and isolating mechanisms as classification criteria for strategic groups is necessary. Furthermore, to broaden the understanding of the strategic group concept and enhance its usefulness, research must be undertaken to elucidate the formation and movement of strategic groups and to identify their causes. This requires an inductive approach that derives key variables through in-depth investigation of industries, and longitudinal studies based on such an approach are desirable.