This paper presents a practical alternative to the clustering technique in strategic group analysis. Using managerial perception as the input, it studies the competitor recognition in the UK computer industry. An analytical framework and the concept of competitive matrix have been developed. Two hypotheses on perceived competition have also been tested. It is argued that firms formulate their competitive strategies on the basis of perceived competition rather than on the conventionally defined industry. The competitive grouping which combines the concept of strategic groups and market segmentation, provides a useful means to conduct such analysis
