Strategic Group Mapping

Pick the two strategic dimensions that most strongly differentiate firms in the industry and that are not highly correlated with each other, so each axis adds independent information. Porter advises using genuine strategic-choice variables — product-line breadth, vertical integration, channel and geographic scope, price-quality position — rather than size or performance measures. If two candidate axes are strongly correlated, firms collapse onto a line and one axis is wasted; if a single dimension dominates competition, a map may not be the right tool at all.

White space is a region of the strategic plane where no firm currently sits. Porter stressed that such gaps are analytically valuable but ambiguous: a vacant position may be an unexploited opportunity that no incumbent has claimed, or it may be empty precisely because the position is structurally unattractive or unviable. The map flags the gap; deciding which interpretation holds requires further analysis of demand, cost structure, and mobility barriers around that position.

Because comparing strategic group maps across arbitrary calendar years can conflate two very different things: firms genuinely repositioning, and the whole competitive structure shifting due to deregulation, technology, or major entry. Fiegenbaum and Thomas define strategic time periods as intervals over which the industry's strategic structure is stable, bounded by structural breaks. Building one map per stable period ensures that movement seen between maps reflects real firm migration within a comparable regime rather than a change in the rules of the game.