Question

Based on Cocacola, pepsi, Red bull and Power horse ( Soft drink companies in general )

how i can construct a strategic group map and display the different market or competitive positions that rival firms occupy in the....... industry. and Based on this map

1.Which strategic group is located in the least favorable market position? Which group is in the most favorable position?

2.Which strategic group is likely to experience increased intragroup competition?

3.Which groups are most threatened by the likely strategic moves of members of nearby strategic groups?

Explanation may help in answer ( no need for numbers in the answer):

       i.           Identification- The first step is to identify the competitive characteristics that differentiate firms in an industry from each other.

     ii.           Plotting- The next step is to plot the chosen firms on a two-variable map using pairs of the differentiating characteristics.

   iii.           Assigning- The third step is to assign the firms that fall under same strategy space into same strategic group.

   iv.           Circling- The final step is to draw circles around each strategic group, making the circles proportional to the size of each group's share of total industry sales.

Answer 1

1. Power Horse has been placed at the least favourable market position. This is so because the demand for Power Horse is quite low in America. Americans do not favour the strong taste of the drink and hence it considerably affects its demand. Coca Cola has the most powerful position in the strategic group map. There are ardent followers of Coke in America and this attributes to its huge market share in the market.

2. PepsiCo is most likely to face intragroup competition in the soft drinks industry. This is so because its offerings are quite similar to that of Coca Cola and people may consume them in substitution.

3. Coca Cola Company is most threatened by likely strategic moves of PepsiCo. This is so because the position of a market leader is often threatened by competition. Moreover PepsiCo is known for following aggressive business and marketing strategies which may try to impact the market hold of Coca Cola.