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Strategic group mapping
1. Submitted to: Submitted by
Ms Sanjna Walia Harleen Kaur
Head, PG. Deptt of Commerce M.com 3rd (sem)
Kamla Nehru College for Women, Phagwara.
2. A strategic group is a concept used in strategic
Management that groups companies within an
industry that have similar business models or
similar combinations of strategies.
For example, the restaurant industry can be divided
into several strategic groups including fast-food
and fine-dining based on variables such as
preparation time, pricing, and presentation
3. Strategic group mapping is
a technique for looking
at your position in your
sector, field or market.
It is tool for competition
analysis Strategic group
map help to define the
scope of firm`s
competitors
6. STEP 2 – IDENTIFY YOUR TWO
KEY VARIABLES
Map the firm on two variable
grid using different
strategic dimensions and
these dimensions should
not be highly correlated .
The competitive factors
should be expressed in a
low to high range with
measurable variables. for
example variable can be
technology quality , safety
features ,better services
, price etc
Quality
Product line
Breadth
7. IDENTIFY THE THIRD VARIABLE
Put the firm that fall in about the same space
in same strategic group . Draw the circles
around each strategic group. The circles
should be proportional to market
share, income level or any other kind of
dimensions.
For example luxury car are put in one group
like Audi and BMW.
8. You’ll need to objectively plot the points on the map. First
locate X, then Y, then place the appropriately sized circle
or figure.
Use the third variable as a key measure of
competitive advantage, and demonstrate
how the first two variables help explain why
there is variance in performance among the
competitors in a group.
10. Assess the overall map. Identify the variance .
Your map should of kind that reveals a firm`s
competitive position.
In summary, your map should have at least a little, if not a
lot, of ‘gap!’ in it. That is, when you share your map
with the client, the client should gain true insight into
why the firm is in a strong or weak competitive position
in the industry.
11. To identify who your direct and indirect
competitors (or possible partners) are
It can illustrate how easy it might be to
move from one strategic group to another
Moreover, sgm may also help
account for difference among firm`s
profitability with an industry.
It may help identify future opportunities
or strategic problems
12. The mapping process help the firm in
indentify its close rivals.
Different strategic groups offer to buyer
different value propositions .
the strategies pursued by firms within
other strategic groups highlight
alternative paths to success. A firm may
be able to borrow an idea from another
strategic group and use this idea to
improve its situation.
13. This model is static and ignore the role of
innovation
This focus is on industry and group
structures rather than individual companies
Successful innovation creates change in
industry structure and altering the
competitive environment
14. The influence of Porter´s Five
Forces loses importance as
strategic groups can have very
different characteristics within
an industry (e.g. big
businesses have a much
higher bargaining power with
their suppliers when compared
to small businesses, as they
have a much higher quantity
of orders).
15. .......
The concept of strategic groups is more
focused on the competition within a group.
In these strategic groups decisive
competition takes place, as the
competition with other groups is of minor
importance.
For example luxury restaurants do not
compete with fast food chains, tough they
both belong to the same sector.
