Explain,why do firms tend to cluster into strategic groups?

Strategic Groups and Marketing Decisions

Complete the following discussions:

  • Although strategic groups tend to be rigid, they are by no means fixed. One of the things managers have to be aware of is which firms may change group membership. With the results from Year 13 of the simulation, consider the following:
    • Why do firms tend to cluster into strategic groups?
    • Would it not make sense for firms to spread out across strategic spaces? Why or why not? Explain your rationale.
    • How likely is it that firms competing in other strategic groups will adapt their strategy to compete directly against you? Explain your rationale.
    • Which firms currently not in your strategic group would be most likely to try and enter your group? Why?
  • Firms also sell in the Internet markets and have to coordinate the Internet marketing strategy with the branded marketing strategy.
    • How do firms that are successful in the Internet market balance their sales there with those in retail markets?
    • Is there any evidence showing firms that emphasize the Internet channel are being hurt in the retail channel and vice versa? Support your answer with examples.
    • A firm has to market an athletic shoe product line that it orders from its factories. Which decisions on the Production and Labor screens are critical to coordinate with the firm’s marketing strategy? Why?

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