Dear readers,
The Meta-analysis published another article of mine on strategic groups. The continuation of the article, hopefully be of interest to you.
Adrian Alvarez, Founding Partner of Midas Consulting, explains how the model used to analyze industries where there are many competitors.
A model for analyzing industries where there are many competitors
No matter where I give lectures (Argentina, Brazil, Panama, Chile, etc.). Does not really matter who I give lessons (military, MBA students, entrepreneurs managers, etc.). usually nobody knows what are the groups strategic.
Actually, this is regrettable, since it is a useful concept to analyze an industry and its trends, especially when there are many competitors. So let's consider this issue in this article.
The strategic groups were the subject of the doctoral thesis of Hunt in 1972 and became popular thanks to the book 'Competitive Strategy', by Michael Porter.
Consider, then, that they are of the strategic groups :
The strategic groups are a number of companies in the same industry that follow similar strategies in some way (for example, companies multinational soft drinks follow similar strategies in relation to the distribution, as bottlers use, high price, high investment in advertising and product, usually have the same tastes and rootedness; the Tubaina by his side. also follow similar strategies).
But why strategic groups emerge?
The strategic groups arise, in general, because: • There
similar goals
• There are similar features
• There are assumptions similes
• Time to market equivalent
• Historias similar
These aspects make the strategies of a group of companies resulting in some respects similar.
Okay, I know because they arise, but it serves to determine the strategic groups?
The usefulness of strategic groups is manifested where there are many competitors, since it facilitates the analysis of conclusions:
• Industrial Sectors
• Scenarios • Difference in profitability
• Four Corners
Obviously such analysis loses precision as long that by focusing on what companies have to like to put them in strategic groups, we lost in the detail level that causes each company is different. But the benefit is that we can better understand what happens in the industrial sector, setting, etc.., When we focus only on strategic groups.
What are the advantages of working with strategic groups?
The strategic groups are a very easy concept to understand, at least in my experience with students, businessmen and managers. Moreover, they are very graphic, as it can make maps of strategic groups, in which it is clear the position of groups in una serie of strategic variables and where can evolve.
Another big advantage is that the maps, summed up a large amount of information, which makes it easier to understand the situation and the conclusions.
What are the disadvantages of the technique?
The first and foremost is that it depends on the analyst, since it is he who, for example, determines the variables that define groups.
Moreover, the strategic groups do not address, specifically, variables such as socioeconomic trends of the environment, legal, environmental, medium, etc.. In short, is a model based on supply rather than demand.
Some of the variables necessary for the realization of the maps, such as sales or profitability, are not always easy to obtain. Finally, as almost all technical analysis, strategic groups give an illusion of certainty.
Implementation of NAP in the model:
Location: groups serve the strategic choice of group where you want to compete, testing strategy, scenarios, four corners, risk analysis, profitability analysis and the determination of competitors (usually competes more with the members of that group, because the strategies are similar.)
temporal Focus: Groups strategic are normally used to analyze the present or the future but can also be used to analyze the past and its evolution.
Simplicity Explanation and Presentation: The model is very easy to understand for its graphic
test of common sense: In the situations mentioned, its use is very appropriate and makes sense for people which are presented
Scope: The strategic groups are successful for analyzing the industry or market
Big hug, Adrian Alvarez Lic
Founding Partner Midas Consulting
Direct Phone (Argentina):
Direct Phone +54-11-4775-8983 (Brazil): +55-11-3010-1685
http://www.midasconsulting.com.ar/
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