Evaluate the Relevance of Strategic Grouping Concept to the Retail Sector in Zimbabwe.

2090 Words Jul 12th, 2013 9 Pages
The strategic grouping concept is used in the grocery retail industry by managers and retail shop owners and researchers to not only develop a classification of strategy conducted in their industry but comparing over different time periods the competitive dynamics and evolution of an industry to be more clearly understood. It helps in creating more value for the customers and all stakeholders in that industry through the development of different strategic group market offerings.
A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies. Michael Porter: “A strategic group is the group of firms in an industry following the same
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The grouping is also important in identifying strategic spaces (opportunities). These are areas that are not being exploited that new entrants or developing firms can take advantage of. For instance The slicer supermarket along the Harare to Masvingo-Beitbridge Road at Mvuma provide shopping to transit guests along that route, an area which was not being explored before.

The strategic groups also chart directions of strategic movements. For instances the groups in the OK Zimbabwe have been making strategic movements to establish shops in the residential shopping malls with examples like Spar in Sam levy village.
The supermarkets in this group are all following that strategy to compete and survive.

Possible Axes for Strategic Group Analysis according to CWWIFG online source were
The Scope of Activities
The extent of product or service diversity can be used to analyse the strategic grouping. The supermarkets in the national wide brands have tended to have a high level of diversity in their products with shops like OK having clothing departments as well as take aware restaurants inside their shops. The smaller shops have smaller compartments with fewer assortments on some of these products line and some do not have other departments such as clothing and hot take away restaurants.

The other thing includes extent of geographical coverage. The extent of geographical coverage will influence the product quantities and assortment to meet the needs of the various