CI-301d · Module 1

Strategic Group Identification

3 min read

Not all competitors compete with each other equally. Strategic groups are clusters of companies within an industry that follow similar strategies along the key dimensions. Companies within the same strategic group compete intensely with each other. Companies in different strategic groups compete indirectly or not at all. Identifying strategic groups reveals who your actual competitors are (not every company in your industry) and where mobility barriers exist (what prevents companies from moving between groups).

Do This

  • Cluster competitors by strategy similarity across multiple dimensions — not by a single attribute
  • Identify mobility barriers between groups — what prevents a competitor from entering your group?
  • Monitor for group membership changes — a competitor crossing a mobility barrier is a significant strategic event
  • Analyze competitive intensity within groups separately — not all groups compete with equal ferocity

Avoid This

  • Treat all companies in your industry as direct competitors — most are in different strategic groups
  • Define groups by a single dimension — groups are multi-dimensional clusters
  • Assume group membership is permanent — strategic pivots can move companies between groups