Strategic groups within an industry affect competition levels from "summary" of Competitive Strategy by Michael E. Porter
In any industry, competition is not uniform across all companies. Instead, firms tend to form distinct groups based on their strategic choices, capabilities, and market positions. These strategic groups within an industry have a significant impact on competition levels. Companies within the same strategic group often compete more directly with one another than with companies in other groups. This is because they offer similar products or services, target the same customer segments, and utilize comparable strategies to gain a competitive advantage. As a result, firms within the same strategic group are more likely to engage in intense rivalry to capture market share and achieve superior performance. On the other hand, companies in different strategic groups face less direct competition. They may serve different customer needs, operate in separate geographic regions, or pursue distinct business models. As a result, firms in different strategic groups are less likely to compete head-to-head and may focus on carving out their unique positions in the market. The presence of strategic groups within an industry can also influence the overall competi...
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