II. Constructing a Strategic Group Map The purpose of constructing a Strategic Group Map is to not only illustrate how rivals within an industry compete, but it should also reveal which rivals stand out and why. Your map should clearly reveal the competitive positions of the firms that compete as rivals in a given segment of the industry. For the purpose of this exercise, you are being asked to create a Strategic Group Map for the attemptile industry, solely based on your knowledge of the car market as a consumer and as a business student. You will be asked to explain and justify your creation of this strategic group map and then be asked to use it to make recommendations There are five steps to this exercise. You are to read the following explanations of the first four steps listed below, and then place your responses to all of the eps on the following pages On the final page (Step 5), you will be asked to develop and then discuss three specific strategic recommendations you would make as a consultant to top executives of one of the firms in the auto industry represented on your map 1. Step 1 - Identify Competitors in the Industry This should be a list of at least ten competitors in the auto industry (by brand. not automaker) For example, say Buick or Chevrolet and not General Motors the parent corporation 2. Step 2 - Identify the Two Key Variables These should not be strongly correlated with each other. Both competitive factors should be expressed in a low to high range that are measurable variables.(eg. price, product quality, brand image, distribution channels) You are to briefly explain what you mean by each of these two variables Then you are lo say why you chose each of these two variables. In these two examples on the next page, the X and Y variables are clearly visible. In the first example, the X variable (the horizontal axis) is distribution channels, and they variable (the vertical axis) is brand image. Likewise, in the second graphic, the X variable is product line breadth, and the Y variable is product quality 3 Examples: High High Brand Image Low Low High Distribution Channels Product Quality Low Low High Product Line Breadth 3. Step 3 - Identify the Third Variable The third varit typically is use to scale the size of the circle or shape used to represent the firm. This variable should be a measure of the firm's competitive advantage in the industry. Typical choices include: market share, revenue, net income, number of locations the firm operates in, etc. Again, this is to be based on your perception of the firm and its relative standing in the marketplace. Briefly say what is your third variable and why did you chose it. 4. Step 4 - Draw the Strategic Group Map based on the previous 3 steps You will need to obiectively plot the points on the map. First locate X, then Y, and then place the appropriately sized circle or figure on it. Be sure to label each axis as well (eg, low to high) The size of the circle should be based off the third variable that you identified in Step 3 Use the third variable as a key measure of competitive advantage. Draw the strategie group map plotting all the companies listed in Step 1 and draw the corresponding groups using the directions given in this document, After drawing the map, briefly describe each of your groups in relation to the first two variables (from Step 2). Basically assess their situation. 5. Step 5 - Three Recommendations based on the Strategic Group Map Select one company profiled in your map, and make three recommendations to that company's top management as a result of what you have presented in the strategic group map Be sure to explain your responses and justify your recommendations. Step 1 - Identify at Least Ten Competitors in the Industry Ford F Series 2 Chevrolet Silverado 3. Ram Pick-up 4. Toyota RAV4 s. Honda CR-V 6 Toyota Camry 7. Chevrolet Equinox Honda Civic 9. GMC Sierra 10. Toyota Tacoma 8 (continue list if you can name more) Tesla Model X Kia K5 Series Mercedes C-Class Series 5 Step 2 - Identify the Two Key Variables Variable #1 (explain what this means and why it was selected) 25 Variable #2 (explain what this means and why it was selected): as selected V polo orion SNS Step 3 - Identify the Third Variable (what it is and why you chose it). Tot OM X 19bol 291023 m2 2201 - 2M Step 4 - Draw the Strategic Group Map based on the previous steps Draw the strategic group map plotting all the companies listed in Step Hand draw the corresponding groups using the directions given in this document Step 4 (continued) After drawing the strategic group map, describe each of the strategic groups that you have created based on the two variables you selected in Step 2. Step 5 - Three Recommendations based on the Strategic Group Map Based on this analysis, if I were a consultant to (insert chosen car company), my strategic recommendations to their top management (along with a justification for each, based on the results of the strategic group mapping exercise) would be: 1 2 3