When drawing a strategic group map
A)one strategic variable and one financial variable should be used as axes for the map.
B)it is important for the variables used as axes to be highly correlated.
C)the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry.
D)it is important to use price as the variable for the vertical axis.
E)the primary objective is to determine which strategic groups are profitable and which are not.

Question

Quizplus · Accepted Answer

The best variables to use as axes for the strategic group map are those that identify the competitive characteristics that delineate strategic approaches used in the industry. These variables should be relevant and meaningful to the industry and should help to differentiate the various strategic approaches used by firms in the industry. Highly correlated variables may not provide enough differentiation to accurately depict the different strategies used by firms. Price may be a useful variable to include, but it should not be the only variable or the primary variable used. Additionally, determining profitability is not the primary objective of the strategic group map, although it can be a helpful outcome.

When Drawing a Strategic Group Map