Overview
Hi All, The concept of strategic groups builds on the idea of competitive advantage. As noted in week 1, there are two generic forms of competitive advantage that tend to win the marketplace: cost leadership and differentiation. Strategic groups are clusters of companies within an industry that pursue similar strategies. Understanding strategic groups helps identify a firm’s direct competitors and the competitive advantages pursued within the group. An example of strategic groups can be found in the motorcycle industry: the Japanese manufacturers (i.e., Honda, Kawasaki, Suzuki, Yamaha) are broad market players that pursue a low-cost competitive advantage. By contrast, Ducati, Harley Davidson, and BMW are focused high-end competitors that pursue differentiation competitive advantage. Generally, because a firm builds a particular set of skills it is best to stay within the strategic group and difficult to move between groups (i.e., Kawasaki will pursue low-cost based competencies and not attempt to become differentiated). Your task is to draw a strategic group map for the chain saw industry. Generally, in any industry that are at least two and often more strategic groups. You need to create a graph that shows which firms follow the same strategy within the industry. You will be graded for the accuracy of the groups within the graph. Sometimes students add a description of the X and Y axes to the graph—but this is less important. After creating the graph, briefly explain in the paragraphs below what strategy is being pursued by each strategic group. The case write up is generally less than two pages (half to two thirds of a page for the graph, and then a few short paragraphs to describe the strategy for each strategic group). Cheers, JH
This is the right instructions for the chainsaw case, I used the wrong prompt last time.