## Strategic Group Mapping

### Definition

A strategic group consists of rival firms that have similar competitive approaches and market positions within an industry. Strategic group mapping visually plots these groups to reveal the competitive landscape.

### Purpose

Strategic group mapping helps in identifying both the weakest and strongest rival companies simultaneously.

> It is the activity of identifying the strongest and weakest companies in an industry by grouping them according to their strategic similarities.

### How It Works

Firms within the same strategic group are each other's closest competitors
Firms in different strategic groups compete indirectly
The map uses two strategic dimensions (e.g., price vs. quality, geographic scope vs. product range) to plot the groups

### Uses

Identifying direct competitors (same group)
Identifying acquisition targets (weakest groups/firms)
Spotting competitive white spaces (unoccupied positions in the map)
Understanding barriers between groups

Worked example

### Example 1

Tomtom Sneaker Brand (MTP1 May 2023): Tomtom faces intense competition and wants to identify the weakest competitors to acquire them and reduce competition. The most helpful tool to begin this plan is Strategic Group Mapping — it directly identifies the weakest rival companies and their strategic positions, enabling targeted acquisition decisions.

### Example 2

MCQ Context (RTP May 2019): 'Consists of those rival firms which have similar competitive approaches and positions in the market.' → This describes a Strategic Group (not a BCG Matrix, Strategy Map, or the entire Industry).

⚠️ Common exam mistakes

Confusing strategic group mapping with the BCG Growth Matrix — BCG analyses a firm's own portfolio of businesses, while strategic group mapping analyses the external competitive landscape.
Thinking strategic group mapping only identifies the strongest rivals — it identifies both strongest and weakest competitors.
Confusing strategic group mapping with a 'Strategic Audit' or 'Portfolio Analysis' — these serve different analytical purposes.

Reference:

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