A successful business model results from business level strategies that create a competitive advantage over its rivals. These decisions determine which strategies are formulated & implemented to put a business model into action.
Implications of Strategic Groups for Competitive Positioning:
Strategic managers must map their competitors:
Map according to their choice of business model
Use this knowledge to position themselves closer to customers
Differentiate themselves from their competitors
Use the map to better understand changes in the industry
Affecting its relative position vis-à-vis differentiation & cost structure
To identify opportunities and threats
Identify emerging threats from companies outside the strategic group
Determine which strategies are successful
Why certain business models are working or not
Fine tune or radically alter business models and strategies to improve competitive position
Competitive Positioning: Strategic Groups Strategic Groups are groups of companies that follow a business model similar to other companies within their strategic group, but are different from that of other companies in other strategic groups.