SGAM is an acronym for "Strategic Group Analysis Model," which is a framework used in strategic management and marketing to analyze and understand the competitive dynamics within an industry or market. Developed by Michael E. Porter, SGAM helps identify and categorize different players or companies within an industry based on their similarities in terms of strategies, target customers, and competitive advantages.
The model recognizes that firms within an industry can be divided into different strategic groups, which are subsets of companies that share similar market positioning and competitive approaches. Strategic groups can be determined based on various factors such as the type of products or services offered, the level of vertical integration, geographic scope, pricing strategy, marketing tactics, and technological innovation.
SGAM provides valuable insights into competition dynamics and industry structure by revealing similarities and differences in how companies within a strategic group compete and serve their target markets. By understanding the strategic groups and their dynamics, firms can better comprehend the competitive landscape and make informed decisions on positioning, differentiation, and resource allocation. Moreover, the model aids in identifying potential competitors, assessing competitive threats, and understanding the factors that influence rivalry and competitive interactions.
In summary, SGAM is a framework used to analyze the competitive dynamics within an industry by categorizing and understanding the strategic groups of companies based on their similarities in strategies, target customers, and competitive advantages.
