The strategic group map is used in analyzing the competitive environment to identify competitors with similar strategies. Grouping competitors by strategic basis helps to significantly better understand the company's competitive environment. In other words, it helps to identify those competitors who are most similar to the company being analyzed and require closer attention, as well as to identify those companies that occupy different positions in the market and follow a different course of development. 52

In order to draw up a map of strategic groups, it is necessary to draw a two-dimensional graph and highlight two characteristics by which companies on the market can be characterized. These characteristics will be used as the name of the abscissa and ordinate axis. Each company in the industry should then be characterized according to these two characteristics. The last step will be to group companies that are closest in characteristics to each other. 53

Source: Gregory G. Dess, Alex Miller. (1993). Strategic Management. New York: McGraw-Hill, Inc. pp. 65

Example maps of strategic groups are given V Appendix 4 .

COMPETITION ANALYSIS SHEET

The main objective of the competitor analysis worksheet is to determine the influence of certain political, economic, social and technical parameters on Porter's five forces, that is, on the danger of new firms entering the market, on the bargaining power of the company's suppliers, on the bargaining power of the company's customers, on the danger of the emergence of substitute products and the intensity of competition between firms. 54

The danger of new firms emerging	High	Bottom.	Bargaining power of producers	High	Bottom.
Economies of scale		xx	Concentration relative to customer industry	xx
Product differentiation		xx	Availability of substitute products	xx
Capital requirement		xx	The importance of the customer for the manufacturer	xx
Cost of reorientation		xx	Manufacturer product differentiation	xx
Control of distribution channels		xx	Cost of client reorientation	xx
Own knowledge		xx	The danger of direct association by producers	xx
Access to materials		xx
Access to government subsidies		xx	Intensity of competition	High	Bottom.
			Number of competitors	xx
Bargaining power of customers	High	Bottom.	Industry growth rate		xx
Customer orientation towards the relevant manufacturer	xx		Fixed costs	xx
Volume of production	xx		Warehousing costs	xx
Differentiation of supplied products	xx	Product differentiation		xx
The Dangers of Reverse Mergering by Clients	xx		Cost of reorientation		xx
Customer knowledge of manufacturers' cost structures	xx		Exit barrier	xx
Customer income amount		xx	Strategic participation	xx
Cost savings on supplied products	xx
The importance of manufacturers' contribution to the quality of the buyer's final product	xx	The dangers of substitute products	High	Bottom.
Share of the client’s total costs for the manufacturer’s products	xx		Probability of a substitute	xx
			Rate of increase in price efficiency relative to substitutes	xx

2.4 Constructing a map of strategic groups of competitors

The strategic group map is used in analyzing the competitive environment to identify competitors with similar strategies. Grouping competitors by strategic basis helps to significantly better understand the company's competitive environment. In other words, it helps to identify those competitors who are most similar to the company being analyzed and require closer attention, as well as to identify those companies that occupy different positions in the market and follow a different course of development.

In order to identify the main competitors of La Dolce Vita LLC, we will build a map of strategic groups based on two main factors: the range of services provided, products and price, quality.

For the study, 4 organizations operating in Moscow were taken (Figure 2)

Figure 2 - Map of strategic groups of competitors

According to the results of the analysis, the company’s direct competitor in terms of price, quality and breadth of assortment turned out to be an organization such as “Double Step Travel”. It should be noted that La Dolce Vita LLC is a leader in terms of the range of services provided, but is inferior to its competitor in the price of services provided. To improve the company's market position, slightly adjust the price.

Company analysis and strategy formation using the example of Aeroflot OJSC

Constructing a map of strategic groups allows you to analyze the market position of competitors, compare their positions, unite them into homogeneous groups and identify the closest competitors to whom you need to pay attention first...

Modeling of business processes at the Domofon-Service LLC enterprise

A process map is a graphical representation of a process, where the steps of the process are depicted in the form of various flowchart symbols, the names of operations (process steps), documents regulating them, process participants, etc. are indicated...

OJSC "Company "Sukhoi": management, strategies, development

It is necessary to evaluate the competitive advantages and disadvantages of competing companies operating in the market. Considering the specifics of the analyzed services, important characteristics serving in the market under consideration...

Description and analysis of processes of telecommunications companies using the example of Riteks LLC

Typical map of the main processes Best Practices (SAP) of the company Riteks LLC (Figure 2). Figure 2 - Typical map of the main processes of the company Riteks LLC The top-level process map for the company Riteks LLC is presented in Appendix 1...

Assessing the competitive status of a company

To determine the competitive status of a company depending on the share occupied by the company in the market, competitive maps are drawn up...

Building the concept of a facility management system

Application of statistical methods of control and quality management in the production of black long tea

A control chart is a tool that allows you to monitor the progress of a technological process and influence it with the help of appropriate feedback, preventing its deviation from the requirements for the process...

Organizational systems design

Like any organization, our studio has competitors...

Development of an innovative development program for JSC "Svetlana-Optoelectronics"

To implement the proposed innovation strategy at the Svetlana-Optoelectronics enterprise, it is necessary to carry out the following activities: · Develop a model of an LED matrix and a housing for future cosmetology equipment...

Risk management in the construction industry

The final step in constructing the map is placing risks on the risk map based on their impact ranks and likelihood ranks. The working group places each risk in the appropriate cell...

Strategic position and place in the market of universities in Novosibirsk using the example of Novosibirsk State University

We will build maps of strategic groups according to the following data (Table 1) In Table. 1 shows universities that can compete with each other based on some characteristics (universities offering narrow specialties such as medicine, communications...

Strategic management of an organization using the example of Ernst&Young

On this map, companies are divided vertically by the types of services offered by the companies. Since almost all large companies have at their disposal several dozen different services...

Strategic management of the enterprise Gorelektrotrans, Kharkov

Let us determine the market share of each enterprise in the services market in years tn and tn+1 using the formula: , highlighting the min and max values ​​of Di in each year. Table 2.4.1...

Development strategy of the company CJSC "BNP Paribas"

The next stage of industry analysis is the construction of a map of strategic groups. Maps of strategic groups allow you to determine the position of Alfeka LLC among competitors, identify the main competitors that need to be monitored first and competitors that are currently not dangerous. All characteristics of the industry were identified and assessed (see Appendix, Table 15). The characteristics were rated on a 5-point scale. Below are maps of strategic groups based on 2 variables that best show the differences and similarities between competitors.

Fig.3

Based on the construction of a map of strategic groups according to two parameters: product price, location, it is clear that Format Cafe (A) is located in a strategic space, isolated, without the presence of competitors. So, the organization’s position according to these parameters is very favorable.

Fig.4

From the map of strategic groups by parameters: level of service - assortment, it is clear that “Format-cafe” and “Studio-coffee” occupy the same strategic space. Therefore, the main competitor in this area is the Studio Coffee cafe.

Fig.5

According to these indicators, Format-cafe's main competitor is Studio-coffee. The situation is complicated by the fact that the Studio Coffee coffee shop, during its short stay in the industry, has already established itself as a very prestigious establishment, thanks to its good advertising policy. The level of qualification of personnel in organizations is at the same level. The cooks and baristas of Format Cafe regularly participate in various competitions (Primorsky Culinary Festival, Bartender of the Year) and win prizes.

Conclusion: the main competitor is "Studio Coffee"

Competitor strategy analysis

Since the cafe is located in the city center, the disadvantage of such premises is the close proximity of competitors offering similar goods and services. However, the location of the Format Cafe is quite advantageous, since there are no establishments of a similar type and concept in the vicinity. In this case, we will consider as competitors establishments with a similar establishment concept: “Studio Coffee”, “Paparazzi”, “Latte” coffee shop.

Due to the confidentiality of this information, it is impossible to conduct a full analysis of competitors’ strategies.

"Studio coffee"

Strategic intentions: to lead the market.

Scale of competition: local

Goals in the struggle for market share: a series of marketing activities in order to attract more visitors.

Strengths: excellent reputation, well-developed image, fame, good location - city center, parking space available

Weaknesses: high average score

Coffee shop "Latte"

Strategic intentions: to conquer and retain your market segment.

Scale of competition: local

Goals in the struggle for market share: strengthen the existing position.

Goals in the struggle for a competitive position: strengthen and expand the existing position.

Action strategy: improve market position.

Strengths: low price, convenient location: close to 2 nightclubs, university

Weaknesses: limited parking space

Coffee shop "Paparazzi"

Strategic intentions: maintain market position

Scale of competition: local

Goals in the struggle for market share: strengthen the existing position, expand the range of dishes.

Goals in the struggle for a competitive position: strengthen and expand the existing position.

Action strategy: a combination of offensive and defensive measures.

Strengths: conquered market segment, favorable location: Arbat, near the embankment.

Weaknesses: high average bill, small selection of dishes.

Using superficial data, we will determine the basic strategies of competitors:

Studio Coffee uses a differentiation strategy. High average bill, aimed at consumers with above-average income. Themed parties are held regularly, especially in the summer, on the summer veranda of the cafe. The difference between these events and other similar ones is that great attention is paid to the organization of events: to attract “dear” visitors, famous DJs from Moscow are invited, a buffet is organized, photographers are invited from the Internet sites “Geometry”, “Tusa”, as well as from the best glossy magazines of the city and region. This creates prestige and an excellent image for the establishment.

"Paparazzi" uses a strategy of focusing on differentiation.

Coffee shop "Latte" adheres to the strategy of low-price leadership. The coffee shop's price is significantly lower than that of its competitors, but they win due to high sales volume.

The choice of strategy for travel agencies is based on an analysis of competition in the industry. In this case, the model of the five forces of competition proposed by M. Porter can be used (Fig. 2.4).

Figure 2.4. Five Forces of Competition Model

The most intense competition occurs between competitors in the industry. As a rule, the struggle is for the size of the market share (especially at the stage of industry growth), since in most cases it is this parameter that determines the others in the long term.

In some cases, the products offered by a company have similar functional characteristics to products produced by other organizations in the same or another industry. This is how substitute products appear. As a result, there is competition for a given product (service) from substitute products. An important concept here is “switching,” i.e., the transition of the average consumer from one product to another with a similar functional purpose (for example, tours to southern countries). Switching probability correlates with switching cost and is a function of a number of parameters. In cases where there is a monotonous switching of consumers from the first product to a substitute product (which often happens in practice), a graphical representation is used that describes this process over time in the form of so-called logistic substitution ^-curves. In Fig. Figure 2.5 shows a hypothetical ^-curve. The L axis represents time, the Y axis represents the capacity of the market for goods with a given functional purpose. The S curve displays the switching process over time, and it should be noted that this curve is normalized in relation to the total market capacity.

Figure 2.5. Substitute S-curve of a hypothetical market for a product with a given functional purpose

Competition from potential competitors occurs when there is a possibility that organizations from other industries may enter a given industry. The threat from potential competitors correlates with the size of the barrier to entry into the industry and the specifics of relations in it. The “height” of the entry barrier can be determined by the following parameters:

Production and marketing effects of scale and development (see paragraph 2 of Chapter 4);

Existing consumer preferences, availability of distribution channels, supplies or the cost of their creation;

Rigidity of government regulation.

The “height” of the entry barrier can be expressed in monetary terms. The decision to enter the industry is determined based on a comparison of the value of the entry barrier and expected profits in the long term. Some components that determine the “height” of the entry barrier can vary significantly over time. For example, the expiration of critical patents tends to reduce the magnitude of the barrier to entry; on the contrary, investments in advertising, the creation of distribution networks and others carried out by industry organizations increase it.

The competitive power of suppliers is due to the fact that industry organizations are the main consumers of raw materials and components, technologies, and personnel, so suppliers have the opportunity to directly influence the efficiency of their functioning. The strength of the supplier’s influence on the consumer is determined by a number of factors, in particular:

Supply-demand balance;

The share of consumer purchases from the supplier in the total volume of purchases;

Degree of specialized™ of purchased objects;

The ability of the consumer to begin creating an analogue or substitute product produced by the supplier;

Interest of the consumer's competitors in this supplier;

Availability of substitute goods for purchased goods produced by other suppliers.

The impact of all of these factors can be expressed in monetary terms, reflecting the cost of switching to another supplier. The higher it is, the greater the competitive power of the supplier, and vice versa.

The competitive power of buyers is that they determine demand.

The positions of industry companies can be assessed in different ways, depending on the prevailing type of industry competition (oligopolistic or monopolistic competition).

In the case of an oligopolistic market, it is advisable to select assessment parameters, describe the main industry organizations based on them, and then carry out the necessary analysis. This is not difficult to do, since the number of parameters is, by definition, small.

In the case of monopolistic competition, it is more appropriate to use the so-called techniques for mapping strategic groups.

This technique allows you to present a general picture of competition and assess the place of each organization in it. Its effectiveness is greatest when the number of competitors is large and it is impossible to thoroughly examine each organization.

A strategic group consists of organizations with similar competitive strategies and market positions. The map construction algorithm is as follows:

Highlighting the parameters by which industry organizations differ, for example, price/quality (high, medium, low), scale of activity (local, regional, national, global), degree of vertical integration (absent, partial, complete), width of the product line (wide, medium, narrow), etc.;

Drawing on a map with axes of points corresponding to organizations;

Assigning organizations located relatively close to each other to strategic groups and highlighting them graphically.

In the process of selecting the main parameters, it should be taken into account that they should not strongly correlate with each other, but at the same time be informative and serve as reliable initial data for analysis. In cases where several pairs of weakly correlated parameters can be selected, a map should be constructed for each pair.

The map of strategic groups will help in forecasting the competitive positions of companies in groups when external conditions change. For some groups these changes are favorable, for others they are neutral, for others they are dangerous.

The closer the strategic groups are located to each other, the more intense the industry competition between them. The strongest competition is observed between organizations belonging to the same strategic group. Less competition occurs between organizations of this group and organizations from the strategic groups closest to it. In cases where strategic groups are far from each other, there may be very little competition between them. In Fig. Figure 2.6 shows a map of strategic groups for a hypothetical industry.

When assessing competition, it is necessary to be able to assess changes in its parameters in the future. It is especially important for con-

Figure 2.6. Strategic group map for organizations in a hypothetical industry

a third-party organization to know or anticipate what actions its closest competitors may take. It is extremely short-sighted to hope for victory without engaging in reconnaissance and without assessing the behavior and plans of the enemy competitor. Forecasting the actions of competitors can be carried out on the basis of drawing up their strategic profiles. Below are some parameters by which an organization profile can be compiled.

Scale of competition: local, regional, national, international, global.

Strategic Intentions: Remain a dominant leader; overtake the industry leader; be among the top five; enter the top ten; overtake a specific competitor; maintain your current position; survive.

Market share goals: expansion through internal growth; expansion through the acquisition of new organizations; maintaining market share (growth in proportion to market growth); loss of market share and increase in profitability.

Let us consider the features of using the model of the five forces of competition and constructing a map of strategic groups using the example of company “S”.

To assess the competition between travel agencies in a given industry, for example in the direction of Thailand, you should first select the main characteristics, which are then used to construct maps of strategic groups. Such characteristics are price, commissions, flexibility in the provision of services, in particular regarding accommodation, transport, length of stay, and service upon request of the client. By scoring these characteristics in conjunction with the types of markets in which competing firms operate (Table 2.2), it is possible to assess their competitive positions and build a map of strategic groups using different combinations of characteristics (Figure 2.7).

Table 2.2

Main comparative characteristics of firms

Analyzing the table. 2.2, companies can be divided into groups:

Firms operating in the regional market and focused on “mixed” consumers - "R-T", "B-H";

Firms targeting middle-income consumers; here we can highlight "I-T";

Firms aimed at people with high and middle income levels - “?>>, "B-T."

The conclusion follows: Firm S occupies a leading position because it has a high degree of flexibility, works with the bulk of the population - consumers with an average level of income, offers high commissions to travel agencies and reduces prices as much as possible to attract consumers with low incomes.

Based on this data, a map of strategic groups can be constructed (Fig. 2.7).

Figure 2.7. Map of strategic groups

Analyzing competitive environment of consumers Using the example of the same company “S”, one can trace the trend of transition from consumers with a high level of income to consumers with an average level of income. Due to the conservatism of clients, the company is forced to limit itself to a certain circle of them, and given the specificity of the business (seasonality), it is forced to focus on regional markets.

Considering competition from substitute products, You should pay attention to tours that satisfy the same customer needs, but perhaps in a different way. In this case, you have to increase the attractiveness of your product (quality, price, novelty, fundamental differences).

Competition from suppliers can be analyzed from the standpoint of the need for recourse and the possibility of replacement in the event of aggravation of the company's relationship with the supplier (the main supplier of transport services of the S company is Aeroflot, which cooperates with many travel agencies).

The importance of the supplier’s product in the product of a given travel agency forces one to take into account the competitiveness and position of this supplier among others.

Competition between “newcomer” firms arises from those firms that operate in other industries. In most cases, they decide to start a tourism business to increase profits. In the case under consideration, they cannot pose a great threat to the company “S”, since they do not have similar experience in the tourism sector.

It is almost always possible to determine who the current leader is; it is much more difficult to say who will be the leader V perspective, since today's leaders do not always automatically remain leaders in the future, although they have a great chance of doing so compared to other industry organizations.

To assess the promising positions of organizations from the point of view of the influence of objective factors, you can use the concept advantageous or disadvantageous positioning, determined by the current location of the organization on the map of strategic groups and the driving forces of the industry.

Control questions

1. What types of competition does a tourism enterprise face in a market economy?

2. What is the national diamond model and what is it used for?

3. What is meant by the determinants of a country's competitive advantage?

4. What are the competitive advantages of the tourism industry, what are its indicators and the driving forces of development?

5. How many industry drivers exist and could be dominant for the tourism industry?

6. What are the components of a travel agency's environmental analysis?

7. What is the essence of the five forces of competition model and what are the possibilities of using it for a travel agency?

8. What is meant by a strategic group of organizations?

9. How is a map of strategic groups constructed?

10. What parameters can be used to create a profile of a travel agency?

The next stage of industry analysis is the construction of a map of strategic groups. Maps of strategic groups allow you to determine the position of the Phoenix restaurant company (Bright LLC) among competitors, identify the main competitors that need to be monitored first and competitors that are currently not dangerous. All characteristics of the industry were identified and assessed (see Table 3.7).

Table 3.7

Identifying industry characteristics to build a map of strategic groups

Characteristics / establishment	Restaurant "Barin" A	Restaurant "Wasabi" B	Cafe "City" C	Cafe "Silhouettes" D	Restaurant "Phoenix" E
1. Product price	High 4.0	Average 3.0	High 4.0	Average 3.0	Average 3.5
2. Location (availability of parking)	Yes 5.0	Yes 5.0	Far 1.0	Nearby, but small 2.0	Yes 4.0
3. Assortment	Wide 5.0	Wide 5.0	Wide 5.0	Average 3.0	Average 3.0
4 Degree of personnel qualification	High 5.0	Low 2.0	Average 3.5	Low 2.0	Average 3.0
5 Service level	High 5.0	Low 1.5	High 5.0	Low 2.0	Average 3.0
6 Image	High 5.0	Low 2.0	High 4.5	Average 2.5	Average 3.5

The characteristics were rated on a 5-point scale. Below are maps of strategic groups based on 2 variables that best show the differences and similarities between competitors.

Rice. 3.2 Map of strategic groups (price, location)

Based on the construction of a map of strategic groups according to two parameters (see Fig. 3.2): price of goods, location, it is clear that “City” (C) and “Silhouettes” (D) are located separately. The main competitors in this area are “Barin” (A) and “Wasabi” (B).

Rice. 3.3 Map of strategic groups (service, range)

From the map of strategic groups by parameters (see Fig. 3.3): level of service - assortment, it is clear that “Barin” (A) and “City” (C) occupy the same strategic space. "Wasabi" (B) stands apart from everyone else; the main competitor in terms of these indicators is "Silhouettes", although they are inferior to "Phoenix" (E) in terms of service.