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SGM For Automobile Industry

A strategic group map (SGM) is used to group companies within an industry that have similar business strategies. Companies within the same strategic group will have comparable product lines, sell in similar price ranges, use identical distribution channels, technological approaches, and offer similar services. To create an SGM, key competitive characteristics that differentiate firms are identified and used to plot companies on a two-variable map. Companies that fall within the same strategic space on the map are assigned to the same group. Circles are then drawn around each group sized proportionally to their market share. The document provides an example SGM for the automobile industry in India based on price, reputation, performance, and model variety.

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308 views4 pages

SGM For Automobile Industry

A strategic group map (SGM) is used to group companies within an industry that have similar business strategies. Companies within the same strategic group will have comparable product lines, sell in similar price ranges, use identical distribution channels, technological approaches, and offer similar services. To create an SGM, key competitive characteristics that differentiate firms are identified and used to plot companies on a two-variable map. Companies that fall within the same strategic space on the map are assigned to the same group. Circles are then drawn around each group sized proportionally to their market share. The document provides an example SGM for the automobile industry in India based on price, reputation, performance, and model variety.

Uploaded by

Jkcement
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SGM for automobile

industry
What is Strategic Group Map?
A strategic group map is a concept used in strategic management that groups companies within an
industry that have similar business models or similar combinations of strategies

Companies in the same strategic group can resemble one another in several
ways:
1. They have comparable product line breadth
2. They may sell in the same price or quality range
3. May have the same distribution channels
4. They depend on identical technological approaches
5. They offer buyers similar services and technical assistance
When all the industry members have essentially identical strategies and have comparable
market positions, that industry will contain one strategic group
Steps to make an SGM
Identify competitive

1
characteristics that
differentiates firms in the
industry

Plot the firms on a two

2
variable map using pairs of
the differentiating
characteristics

Assign firms that fall in about

3 the same strategy space to


the same strategic group

Draw circles around each strategic


group, making the circles

4 proportional to the size of group’s


share of total industry sales
revenue
SGM for automobile industry in Indian context

Variables Considered
high
Porsche,
• Price
BMW,
Ferrari,
Lamborghini
Audi,
Mercedes • Reputation
Jaguar
Benz • Performance
• Model variety
Price,
Volkswagen,
Reputation, Honda,
Performance Ford
Maruti,
Hyundai,
Nissan,
Tata motors,
Toyota Mahindra

Renault

Low
Low high
Model variety

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