Strategic Groups, Strategic Choices, Generic Strategies and Hybrid Strategies
Strategic Groups * “the group of firms in an industry following the same strategy along the same strategic dimensions” (Porter, 1980) * “a set of firms competing within an industry on the basis of similar scope and resource commitments” (Cool & Schendel, 1968)
Competitive strategy = a choice of which strategic group to compete in = the choice of the easiest group to ‘get into’
Strategic groups are organisations within an industry with similar strategic characteristics, following similar strategies or competition on a similar bases. It helps understand who are the most direct competitors of any given organisation, on what basis competitive rivalry is likely to take place within each group and how it is different from one group to another. Mobility between groups depends on the extent to which there are barriers to entry between one group and another.
Just as a new market space often can be found by looking across substitute industries so it can be found by looking across strategic groups. The term refers to a group of companies within an industry that pursue a similar strategy. In most industries, all the fundamental strategic differences among industry players are captured by a small number of strategic groups.
Strategic Groups can generally be ranked in a rough hierarchical order built on two dimension of performance. Most companies focus on improving their competitive position within a strategic group. The key to creating a new market space across existing strategic groups is to understand what factors determine buyers decisions to trade up or down from one group to another. Kim and Mauborgne(2004) Harvard Business Reviewon Innovation, p10
Carrying out a strategic group analysis * Identify relevant competitors and their competitive behaviour/strategic dimensions * Identify opportunities and threats * Better understanding of dynamics over time * Centrality of mobility barriers
From the analysis * Analyse attractiveness of
Competitive strategy = a choice of which strategic group to compete in = the choice of the easiest group to ‘get into’
Strategic groups are organisations within an industry with similar strategic characteristics, following similar strategies or competition on a similar bases. It helps understand who are the most direct competitors of any given organisation, on what basis competitive rivalry is likely to take place within each group and how it is different from one group to another. Mobility between groups depends on the extent to which there are barriers to entry between one group and another.
Just as a new market space often can be found by looking across substitute industries so it can be found by looking across strategic groups. The term refers to a group of companies within an industry that pursue a similar strategy. In most industries, all the fundamental strategic differences among industry players are captured by a small number of strategic groups.
Strategic Groups can generally be ranked in a rough hierarchical order built on two dimension of performance. Most companies focus on improving their competitive position within a strategic group. The key to creating a new market space across existing strategic groups is to understand what factors determine buyers decisions to trade up or down from one group to another. Kim and Mauborgne(2004) Harvard Business Reviewon Innovation, p10
Carrying out a strategic group analysis * Identify relevant competitors and their competitive behaviour/strategic dimensions * Identify opportunities and threats * Better understanding of dynamics over time * Centrality of mobility barriers
From the analysis * Analyse attractiveness of