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Strategic Group Analysis is an analytic tool to determine those organizations in an industry they have
1. similar strategic characteristics
2. they follow similar strategies
3. they use similar principles in comptition
Strategic Group Analysis (SGA) aims to identify organizations with similar strategic characteristics, following similar strategies or competing on similar bases. Such groups can usually be identified using two or perhaps three sets of characteristics as the bases of competition.
Examples of the SGA:
· Extent of product (or service) diversity.
· Extent of geographic coverage.
· Number of market segments served.
· Distribution channels used.
· Extent of branding.
· Marketing effort.
· Degree of vertical integration.
· Product (or service) quality.
· Pricing policy.
Use of Strategic Group Analysis This analysis is useful in several ways:
· Helps identify who the most direct competitors are and on what basis they compete.
· Raises the question of how likely or possible it is for another organization to move from one strategic group to another.
· Strategic Group mapping might also be used to identify opportunities.
· Can also help identify strategic problems.
