Question

what are the concepts of strategic groups and mobility barriers?

Answer 1

Strategic Groups: It describes about an industry that have similar strategies or business. An industry will have different business sections and different marketing approaches. Every section will have its own features, chances, operating procedures, etc., but they follow a same strategy to every section and they are called as strategic groups.

Example: Let’s consider textile industry, it consists of different sections and each one is different within the industry such as pricing, materials, machinery, fabrics and many more. Every section is different and has its own operating system, but works under same strategy and face lots of competition in the market.

Advantages:

· Helps to analyze market barriers.

· Provides a path to achieve profits.

· It creates many opportunities.

· Helps to identify our competitors.

Disadvantages:

· Time consumption.

· It is pointless, if we are unclear with the market.

· Should keenly concentrate on competitive strategies.

Mobility Barriers: Generally, Mobility barriers will bring up the barrier movement from one strategic group of business to another. It deals with the concept of barrier entry and exist policy in the market. They tend to provide specific differentiation, but it eventually affects the industrial structure.

Example: Charlie, is having a textile industry so he decided to step into a retail business with his quirky collections, to attract more customers and earn profits is the only motive. In order to enter in this business, Charlie should get confirmation from mobility barriers about their entry into the market and if things didn’t turn well they are the one who decides the exist process from the market.

Advantages:

· Helps to give a chance to new ideas.

· Improves employment opportunities.

· If a company decides to invest in different segments, then it is a profitable scenario.

Disadvantages:

· Risk factor is very high.

· It fights with different, quirky strategies with many companies.

· It is difficult to maintain each strategic group as it leaves a unique spark in the market.