strategic group


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strategic group

a group of firms within a MARKET or INDUSTRY which each pursue broadly similar policies in respect of product and market coverage, pricing, vertical integration etc. Thus, an industry may comprise a number of distinct groups of firms depending upon differences in their business strategies: for example, one strategic group in an industry might consist of suppliers who offer a full product range from basic to luxury items and sell nationally; other suppliers in the same industry might concentrate solely on luxury items and sell in a limited number of local markets. See MOBILITY BARRIER.

Strategic-group analysis is used by corporate planners as a means of positioning and repositioning a firm in a market, so as to establish COMPETITIVE ADVANTAGES over rival suppliers as well as to identify possible gaps in the market which might be exploited. See BUSINESS STRATEGY, COMPETITIVE STRATEGY.

strategic group

a set of firms within a MARKET that are similar to one another and different from firms outside the group. Firms within the strategic group will tend to sell similar products and/or serve the same MARKET SEGMENTS and may compete intensely with one another. However, they may not compete with firms in other strategic groups within the market which are selling different products or serving different market segments. Thus a market may consist not of a single set of sellers but a number of distinct non-competing groups. MOBILITY BARRIERS between strategic groups, like BARRIERS TO ENTRY into a market, serve to protect firms within a strategic group from entry by other firms into the market.
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