Strategic Group Mapping

1. Analyzing the overall industry and indentifying those competitive characteristics that differentiate firms in the industry. Variables selected as axes for the map could be identified during the process of industry analysis.
2. Variables selected as axes for the map could be product-line breadth (wide, narrow), price (high, medium, low), quality (high, medium, low), geographic coverage (local, regional, national, global) etc. Using two-variable map, plot all the firms in the industry. For example price (high, medium, low) can be taken on x axis whereas product-line breadth (wide, narrow) on y axis and all the firms can be plotted accordingly.
3. All the firms that fall in the same strategy space should be allocated to the same strategic group.
4. Finally, sketch circles around each strategic group. The size of the circles depends upon the share of a strategic group in the total industry sales revenue.

U.S. Restaurant Chain Industry Strategic Group Mapping

There are always competitive pressures and driving forces which adversely affect the firms in strategic groups. Therefore, some firms may try to shift to a more favorably situated group. This shifting is however difficult if the entry barriers of the target strategic group are high. An arrow can be attached to the circles showing the targeted direction of the firms which are trying to change their competitive positions on the map.