Strategic Group Mapping

Read the overview below and complete the activities that follow.

A strategic group consists of those industry members with similar competitive approaches and positions in the market. Companies in the same strategic group can resemble one another in any of several ways: They may have comparable product-line breadth, sell in the same price/quality range, emphasize the same distribution channels, use essentially the same product attributes to appeal to similar types of buyers, depend on identical technological approaches, or offer buyers similar services and technical assistance. Illustration Capsule 3.1 presents a two-dimension diagram reflecting how rivals in the U.S. casual dining industry are positioned.

Strategic group mapping is a valuable tool for understanding the similarities, differences, strengths, and weaknesses inherent in the market positions of rival companies. Rivals in the same or nearby strategic groups cautiously, if at all, look for opportunities in other industries. A competitively weak company in an unattractive industry may see its best option as finding a buyer, perhaps a rival, to acquire its business. The lesson of strategic group mapping is that some positions on the map are more favorable than others. The profit potential of different strategic groups varies because of strengths and weaknesses in each group's market position. Often, industry competitive pressures and change drivers favor some strategic groups and hurt others.

The strategic group map presented here and in Illustration Capsule 3.1 displays the comparative market positions of companies in the U.S. casual dining industry.

\f