2.3.1 What are Strategic Groups?

A strategic group is defined as a group of corporations that employ the same or similar strategies in a particular industry. Hunt discovered that some companies follow very different strategies when compared with other companies in the same market and classified uniform industry sub-groups based on their value adding chain.

Those sub-groups, which display similar behaviour along key strategic dimensions, were called strategy groups. Porter discovered that individual strategic group members face similar threats and opportunities in the competitive market. Furthermore, similar resource configurations form protective barriers around the strategic groups.

The strategic behaviour and performance within a strategy group are very similar. The industry may consist of several or only one strategic group. A strategic group may consist of one or more members. (Müller-Stewens 2005)