Companies in an industry often differ from each other with respect to factors such as distribution channels used,market segments served,product quality,technological leadership,customer service,pricing policy,advertising policyand promotions.Within most industries it is possible to observe groups companies in which each member follows the same basic strategy different from the one followed by companies in other groups.These groups of companies are known as strategic groups. Types of strategic groups:
Strategic groups are follow into two categories:
The companies in this Proprietary groups are pursuing a high-risk/high return strategy. It is a high risk strategy because of Sopura Silk is difficult and expensive.It is also a high-return because they can charge high prices as the innovator has monopoly on its production and sale.
The companies in this group are characterized by low Research and Development spending and an emphasis on price competition. They are pursuing a low-risk, low return strategy. It is low risk because they are not investing millions of TK. in Research and Development. It is low-return because they cannot charge high prices. Sopura as a strategic group:
By considering the activities that are performed by Sopura silk helps to come into conclusion that it falls under generic group for the following reasons:
• It has no R&D department.
• It is pursuing low risk and low return strategy.
• It has no R&D,so it can not produce innovative products & charge so much higher price. It is price is competitive in market.