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Chosen Company - Amazon
Draw a strategic group map of Amazon. A strategic group map is a powerful tool to show where the company is positioned relative to their competition. You need three variables to build a useful strategic group map: the measure of competitive advantage (the size of the circle), such as market share, revenues, etc., and two most important drivers of the competitive advantage, the horizontal (X) and vertical (Y) axis. The drivers of competitive advantage delineates how firms compete in this industry, such as marketing or R&D expenses, product quality, level of capacity, product line breadth, etc. Another key point is that the variables selected for the horizontal and vertical axis should be strongly related to the competitive advantage, but they should not strongly correlated to each other. For instance, price and product quality are highly correlate, and should not be chosen simultaneously as two main drivers. Weakly correlated variables represent relatively independent drivers of competitive advantage. The overall goal of creating a strategic group map is to find key variables that help explain why one company has a significantly different competitive position in the market.
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