Recommend a tool to analyze the competitive position of various rival companies in the market and outline the step-by-step procedure for using the…

A tool to identify the market positions of rival companies by grouping them into like positions is Strategic Group Mapping. A strategic group consists of those rival firms which have similar competitive approaches and positions in the market. The procedure for constructing a strategic group map and deciding which firms belong in which strategic group are as follows: Identify the competitive characteristics that differentiate firms in the industry typical variables that are price/quality range (high, medium, low); geographic coverage (local, regional, national, global); degree of vertical integration (none, partial, full); product-line breadth (wide, narrow); use of distribution channels (one, some, all); and degree of service offered (no-frills, limited, full). Plot the firms on a two-variable map using pairs of these differentiating characteristics. Assign firms that fall into about the same strategy space to the same strategic group. Draw circles around each strategic group making the circles proportional to the size of the group's respective share of total industry sales revenues.