Strategic groups in Strategic Management

Strategic Groups, benefits, and implications of Strategic Groups

1. Strategic Groups Strategi c Management Prepared by Thippeswami H VSK University Ballari

2. Meaning of Strategic Group 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 Strategic group analysis aims to identify organisations with similar strategic characteristics.

3. Meaning of Strategic Group A strategic Group is a cluster of industry rivals that have similar competitive approaches and market positions

4. Benefits of Strategic Group It helps to identify who the most direct competitors are and on what basis they compete. Strategic group analysis also be used to identify opportunities. Strategic group analysis also help to identify strategic problems.

5. Implications of Strategic Groups Thus, the implications of strategic groups are: a. A company’s closest competitors are those in its strategic groups, not those in other strategic groups. A major threat to a company’s profitability can come from within its own strategic group. For instance, although Maruti Suzuki cars are in the automobile industry, it is not a competitor of Mercedes-Benz or BMW. b. Porter’s five forces can all vary in intensity among different strategic groups within the same industry. c. Individual strategic group members face similar threats and opportunities in the competitive market. Furthermore, similar resource configurations form protective barriers around the strategic groups.

6. Conclusion Examination of the strategic groups in an industry provides a firm’s executives with a better understanding of their closest rivals, reveals alternative paths to success, and highlights untapped opportunities.

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