What Is Strategic Group Analysis?

Strategic groups, also known as strategic clusters and strategic groups within the industry, refer to a group of companies in an industry that implement the same or similar strategies and have similar strategic characteristics. In an industry, if all companies are implementing basically the same strategy, there is only one strategic group in the industry. If every company pursues a different strategy, there are as many strategic groups as there are companies in the industry. Of course, under normal circumstances, there are only a few strategic groups in an industry, and they use strategies of fundamentally different nature. The number of companies in each strategic group varies, but the strategies are the same.

Strategic Group

Strategic groups, also known as strategic clusters and strategic groups within the industry, refer to a group of companies in an industry that implement the same or similar strategies and have similar strategic characteristics. In an industry, if all companies are implementing basically the same strategy, there is only one strategic group in the industry. If every company pursues a different strategy, there are as many strategic groups as there are companies in the industry. Of course, under normal circumstances, there are only a few strategic groups in an industry, and they use strategies of fundamentally different nature. The number of companies in each strategic group varies, but the strategies are the same.

Chinese name

Strategic Group

Foreign name

Strategic groups

nickname

Strategic cluster

Nature

A group of companies with similar strategic characteristics

In addition to the broad strategic aspects, the enterprises in the same strategic group are very similar to each other in many aspects. Under the influence of similar strategies, they will respond similarly to the external environment, take similar competitive actions, and occupy roughly the same

In 1972, Michael S. Hunt from

In the previous study of strategic groups, the development of the method of dividing strategic groups can be divided into two stages, namely, the univariate division stage and the multivariate division stage.

Early in the study, researchers followed

Since the emergence of the concept of strategic group, the research on the relationship between strategic group and performance has been a hot topic in the theoretical research of strategic group. On the one hand, it shows that this relationship research has important practical significance, on the other hand, it is also because clear and convincing conclusions have not been reached in this relationship research.

From a theoretical analysis, some researchers believe that it is precisely because of the existence of mobile barriers that the

The existence of strategic groups has always been a focus of strategic group research. The idea of dividing strategic groups by mobile barriers emphasizes that potential entrants must overcome various barriers such as cost advantages, investment risks, and long-term returns. It can be considered that the mobile barrier is the basis of the existence of a strategic group, and is an important factor in deciding to move between different strategic locations or to move an enterprise from one group to another. Therefore, in the division of the strategic group, the strategic group is basically consistent with the actual situation of the industry, and a mobile barrier has been established for a long period of time, it can be said that the strategic group exists. When testing the stability of strategic group members, if the group members have changed excessively,

In general, the following four factors determine the degree of competition between strategic groups in an industry.

1. The degree of mutual market involvement between strategic groups.

The so-called degree of market involvement is the degree to which strategic groups compete for the same customer, or the degree to which they compete for customers in different market segments. When the market between strategic groups is involved a lot, there will be fierce competition between strategic groups.

For example, in the fertilizer industry, customers (farmers) are the same for all strategic groups. When strategic groups focus on very different market segments, their interest in and influence on others is much smaller. When their sales targets are very different, the competition is more like competition between groups in different industries.

2. Number of strategic groups and their relative sizes.

The greater the number of strategic groups in an industry and the closer the market shares of each strategic group, the more intense the competition between strategic groups.

A large number of strategic groups means that the groups are separated, and a group has more opportunities to attack other groups by reducing prices or other tactics, thereby stimulating competition between the groups. Conversely, if the scale of a group is extremely uneven, such as a group's industry holding a small share, while another group has a large share, then the difference in strategy is unlikely to cause a great deal of competition between strategic groups. Large impact, because small groups are too weak, it is unlikely to affect large groups with their competitive tactics.

3. Product differentiation established by the Strategic Group.

If the different strategies of each strategic group distinguishes customers and their respective preferences for certain trademarks, the degree of competition between strategic groups is much lower than when the products sold by the group are considered as alternative products.

4. Differences in group strategy.

The so-called strategic difference: refers to the degree of dispersion of the strategies pursued by different strategic groups in key strategic directions, including strategic reputation, sales channels, product quality, technological leadership, cost status, service quality, vertical integration, and price , Relations with the parent company or host government, etc.

If other conditions are the same, the greater the strategic differences between the groups, the more likely there will be only small-scale friction between the groups. The group pursues different strategies leading to great discrimination in their competitive thinking and makes it difficult for them to understand each other's behavior, thereby avoiding blank competitive actions and reactions.