Not all positions on a strategic group map are equally attractive becauseQuestion 1AnswerA.small strategic groups are always less profitable than large strategic groups.B.entry and exit barriers are different for each strategic group.C.across-group rivalry is always weakest at the outer edge of the strategic group map.D.industry driving forces and competitive pressures favor some groups and disadvantage others.E.key success factors are substantially different for differently positioned industry participants.
Question
Not all positions on a strategic group map are equally attractive becauseQuestion 1AnswerA.small strategic groups are always less profitable than large strategic groups.B.entry and exit barriers are different for each strategic group.C.across-group rivalry is always weakest at the outer edge of the strategic group map.D.industry driving forces and competitive pressures favor some groups and disadvantage others.E.key success factors are substantially different for differently positioned industry participants.
Solution
The correct answer is D. Industry driving forces and competitive pressures favor some groups and disadvantage others.
Here's why:
A strategic group map is a graphical representation of market positions of firms in an industry. Not all positions on this map are equally attractive because the profitability and success of a firm depend on various industry dynamics and competitive pressures.
A. The size of strategic groups (small or large) does not necessarily determine profitability. It depends on various factors like the firm's strategy, resources, competition, etc.
B. While entry and exit barriers do vary among strategic groups, they alone do not determine the attractiveness of a position.
C. Across-group rivalry is not always weakest at the outer edge of the strategic group map. The intensity of rivalry depends on factors like the number of competitors, their capabilities, industry growth rate, etc.
D. Industry driving forces and competitive pressures can favor some strategic groups over others. For example, a technological change (driving force) might favor firms that are technologically advanced (a strategic group), making their position more attractive.
E. While key success factors can be different for differently positioned industry participants, they alone do not determine the attractiveness of a position. It's the interplay of these factors with industry dynamics and firm's capabilities that determine the attractiveness.
Similar Questions
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