Companies that sell products or offer similar services to the same segment of the population are in a strategic group. For example, a fine dining restaurant and a fast food restaurant are both restaurants, but the companies would be in different strategic groups, since they normally do not have the same customers. Similarly, a fashion boutique and a fine dining restaurant serve the same clientele, but they are in different strategic groups because the companies offer different products. The examination of companies operating within the same strategic group is called analysis of strategic groups.
This type of analysis it is often discussed in conjunction with the market focus. In the market approach, the population of consumers is divided into market segments that share common characteristics such as level of education, income, age and gender. Research firms study the general preferences of market segments and then use those preferences in gearing products and services towards specific market segments that are served by strategic groups.
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The objectives of the analysis of strategic groups vary depending on different characteristics of the strategic groups, including the size of the market, the diversity of products offered, the geographic proximity of competing companies, and where the products are sold. products. Branding, marketing, quality and the price they are also factors that must be considered and taken into account. For example, a company that provides services to consumers who value low prices might carry out a analysis to determine that competing products in that sector fall on the low-price versus quality. The results of this group analysis could help the company determine how to price the products and establish quality control.
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A company could use this analytical tool to identify competitors and determine how companies act within the competition of that group. Corporations launching a new product could conduct an analysis to determine how to compete when entering the market. The creating a map of companies serving each market segment helps analysts discover any market that are insufficiently served or useless by strategic groups existing.
The product positioning and differentiation are two strategic marketing techniques that benefit from strategic group analysis. The means of positioning ensure that a product occupies a unique place in the mind of the consumer, and the means of differentiation make a product appear different from products competitors. In both cases, having a competitive frame of reference can help make a product appear uniquely better than other products in the same strategic group.
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For all this, a in-depth analysis it is a fundamental step for any company that wants to compete with its rivals in the business niche in which it focuses.
