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Strategic group mapping helps to look at the industry as whole and the standing of each firm individually Purpose of strategic group mapping is to: Identify broad characteristics that differentiate firms in the industry from one another Add to the picture of what life is like? in the industry
Purpose
The purpose of competitor analysis is to assist the company to develop its competitive advantage and enable it to defeat its rival companies Contribution to the understanding of the competitive environment of the firm was done Michael Porter of the Harvard Business School
CORE CONCEPT: The threat of entry is stronger when entry barriers are low, when there is a sizable pool of entry candidates, when industry growth is rapid and profit potentials are high, and when present firms are unable or unwilling to strongly contest a newcomers entry.
The successful company will always try to build defense, defeat and compete successfully CORE CONCEPT: The stronger the forces of competition, the harder it becomes for industry members to earn attractive profits.
2. Differentiation: attempt to develop products that are known in the industry as unique 3. Focus: concentration on a specific market segment within which an attempt is to achieve either a cost advantage or differentiation
Concluding remarks
A company achieves sustainable competitive advantage when an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable. The stronger a companys financial performance and market position, the more likely it has a well-conceived, well-executed strategy.