Question 1

The concept of strategic groups is relevant to industry and competitive analysis because
A) firms in the same strategic groups are rarely close competitors-a firm's closest competitors are usually in distant strategic groups.
B) strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors.
C) competition grows in intensity as the number and diversity of the strategic groups in an industry increases.
D) the profit potential of firms in the same strategic group is usually very similar.
E) competitive pressures tend to be weaker within strategic groups than across strategic groups.

Accepted Answer

Strategic group mapping helps identify the position of each competing firm and their closest competitors. It allows for a better understanding of the competitive environment and helps firms to develop competitive strategies.

Question 2

Which of the following pairs of variables are LEAST likely to be useful in drawing a strategic group map?
A) geographic market scope and degree of vertical integration
B) brand name reputation and distribution channel emphasis
C) product quality and product-line breadth
D) level of profitability and size of market share
E) price/perceived quality and image range and the extent of buyer appeal

Accepted Answer

Level of profitability and size of market share are outcomes of strategic positioning rather than dimensions that define strategic groups, making them less useful for creating a strategic group map.

Question 3

Strategic group mapping is a visual technique for displaying
A) how many rivals are pursuing each type of strategy.
B) which companies have the biggest market share and who the industry leader really is.
C) the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors.
D) which companies have the highest degrees of brand loyalty.
E) which companies have failing business models.

Accepted Answer

Strategic group mapping is a technique that displays different market or competitive positions occupied by rival firms in an industry and identifies their closest competitors. Therefore, the best choice is C. A is incorrect because that is not the focus of strategic group mapping. B is incorrect because it is about market share and industry leadership, not strategic groups. D and E are both incorrect because neither brand loyalty nor failing business models are the focus of strategic group mapping.

Question 4

To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's
A) current strategy, financial health, market share, resources and capabilities.
B) strategic group, assumptions, resources and capabilities, financial health.
C) current strategy, assumptions, resources and capabilities, objectives.
D) market share, strategic group, driving forces, assumptions.
E) resources and capabilities, assumptions, current strategy, objectives.

Accepted Answer

To predict a competitor's next moves, it is important to appraise several factors including current strategy, financial health, market share, resources, and capabilities. These factors will provide insights into what actions the competitor is likely to take in the future. The other options also include important factors, but this combination is the most comprehensive and likely to provide the most accurate predictions.

Question 5

A rival's strategic moves and countermoves are
A) indicators for the visualization of strategic mapping techniques.
B) enabled and constrained by the set of capabilities they have at hand.
C) measured by the extent to which they can unveil financial objectives.
D) responses to the broader definition of the industry opportunities.
E) signs of the competitive pressures from the industry.

Accepted Answer

Rivals' strategic moves and countermoves are enabled and constrained by the set of capabilities they have at hand. This means that their actions will be influenced by their resources, strengths, weaknesses, and other factors related to their operations. Other choices are not directly related to the influence of rivals' actions on a company's strategy.

Question 6

Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT
A) the best strategy.
B) flawed or weak strategies.
C) strong performance objectives.
D) reliable resources and capabilities.
E) similar competitive approaches.

Accepted Answer

Good intelligence about competitors allows a company to determine which competitors have the best strategy and strong performance objectives, as well as reliable resources and capabilities. It can also identify competitors with flawed or weak strategies. However, it does not necessarily reveal which competitors have similar competitive approaches.

Question 7

In mapping, strategic groups
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.

Accepted Answer

The best variables to use as axes for strategic group mapping are those that identify competitive characteristics distinguishable among the strategic approaches used in the industry. Highly correlated variables are not necessarily important, and price is not always the ideal variable to use for the vertical axis. The primary objective of strategic group mapping is not necessarily to determine profitability, but rather to identify and analyze the patterns of strategic variables among competing firms in the industry.

Question 8

The key success factors in an industry
A) are those competitive factors that most affect industry members' abilities to prosper in the marketplace-the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss.
B) are determined by the industry's driving forces, which are essential to surviving and thriving in the industry.
C) hinge on how many different strategic groups the industry has operating within the industry and their level of profitability and sustainable advantages.
D) depend on how many rivals are trying to move from one strategic group to another without losing momentum.
E) are a function of such considerations as how many firms are in the industry, how many have market shares above 5 percent, and whether the business models being used are similar or diverse.

Accepted Answer

Key success factors in an industry are those factors that affect a company's ability to succeed in the market. These factors are specific to each industry and include strategy elements, product attributes, operational approaches, resources, and competitive capabilities. Choice A captures this definition accurately. The other options (B, C, D, and E) describe other considerations that may be relevant to an industry's success, but they do not capture the essence of key success factors.

Question 9

Competitive intelligence can be gleaned from
A) company press releases, company websites, management presentations, and annual reports and 10-K filings.
B) SWOT analysis, PESTLE analysis, KSF analysis, and driving forces analysis.
C) strategic group maps, Value Net analysis, and five force analysis.
D) financial ratio analysis, KSF analysis, driving forces analysis, and five forces analysis.
E) KSF analysis, Value Net analysis, and driving forces analysis.

Accepted Answer

Company press releases, company websites, management presentations, and annual reports and 10-K filings provide detailed information on a company's current and future plans, strategies, and financial performance. This information can be used to gain competitive intelligence. SWOT analysis, PESTLE analysis, KSF analysis, and driving forces analysis are all frameworks for analyzing a company's internal and external environment but do not provide direct competitive intelligence. Strategic group maps, Value Net analysis, and five force analysis are all tools for analyzing a company's competitive environment but do not provide direct competitive intelligence. Financial ratio analysis, KSF analysis, driving forces analysis, and five forces analysis are all useful for understanding a company's competitive position and strategy, but do not provide direct competitive intelligence. KSF analysis, Value Net analysis, and driving forces analysis are all frameworks for analyzing a company's strategy but do not provide direct competitive intelligence.

Question 10

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?
A) The variables chosen as axes for the map should indicate important differences among rival approaches.
B) The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables.
C) The variables chosen as axes for the map should be highly correlated.
D) Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure.
E) The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

Accepted Answer

The variables chosen as axes for the map should not be highly correlated as this would result in redundancy and lack of meaningful differentiation between strategic groups. The other options are appropriate guidelines for developing a strategic group map.

Question 11

One of the things that can be gleaned from a strategic group map of industry rivals is
A) which rivals have been in business longer and thus have greater access to experience curve effects.
B) which rivals have newer manufacturing facilities and thus have achieved greater product quality.
C) which strategic groups have the highest profit margins and the highest customer switching costs and thus represent key operating characteristics.
D) that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces.
E) which strategic groups are currently being shunned by customers because of high prices and relatively low product quality.

Accepted Answer

A strategic group map allows for a visual representation of the competitive landscape of an industry. It can show which strategic groups are more favorably positioned than others due to weaker competitive forces and/or more favorable impacts from industry driving forces. This information can be used to develop strategic plans and identify potential opportunities and threats. The other answer choices provide some valid information but do not directly relate to what can be gleaned from a strategic group map.

Question 12

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because
A) it identifies who the industry's current market share leaders are.
B) it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence.
C) it helps identify which rival is in which strategic group.
D) it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes.
E) it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Accepted Answer

Having good competitive intelligence about rivals' strategies and moves helps a company anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence. This allows the company to stay ahead of the competition and potentially gain market share.

Question 13

Angela and Jeff are co-owners of five specialty baking stores in their region. Which of the following questions would NOT help them to predict the next strategic moves and countermoves of their rivals?
A) Which mode of transport does the rival's supplier use?
B) How does the rival manage door-to-door deliveries at no extra cost?
C) What percentage of customers frequent the rival's store?
D) Why are the rival's cupcakes so popular among customers?
E) How frequently does their rival fulfill special orders for custom cupcakes and how large are those special orders?

Accepted Answer

The mode of transport used by the rival's supplier is unlikely to provide insights into strategic moves or countermoves, as it does not directly relate to competitive strategies or customer preferences.

Question 14

Not all positions on a strategic group map are equally attractive because
A) 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.

Accepted Answer

The answer of Not all positions on a strategic group...

Question 15

Strategic group map analysis does NOT entail drawing conclusions about
A) where on the map is the best place to be and why.
B) which companies/strategic groups are destined to prosper because of their positions.
C) which companies/strategic groups seem destined to struggle.
D) what accounts for why some parts of the map are better than others.
E) where on the map is the easiest position to shift from to a more favorably situated position.

Accepted Answer

Strategic group map analysis focuses on understanding competitive positions and dynamics, not on identifying the easiest positions to shift from.

Question 16

An industry contains one strategic group when all sellers
A) are subject to the same driving forces.
B) place about the same emphasis on various distribution channels.
C) use the same key success factors to differentiate their products.
D) pursue essentially identical strategies and have similar market positions.
E) pursue varying distribution channels and product attributes, and have customer service attributes that differentiate them in the marketplace.

Accepted Answer

A strategic group is a group of companies within an industry that pursues similar strategies and has a similar market position. Therefore, choice D is the best option as it describes the characteristics of a strategic group. Choices A, B, C, and E do not fully capture the notion of a strategic group.

Question 17

The extent to which firms are meeting objectives suggests they
A) are likely to prosper in the future.
B) are likely to continue their present strategy with only minor fine-tuning.
C) are virtually certain to make fresh strategic moves.
D) recognize "status quo" as the best course of action to adopt.
E) realize refocusing will ensure competitive gains.

Accepted Answer

If firms are meeting their objectives, it suggests that their current strategy is effective, and they may only need minor adjustments rather than major strategic changes.

Question 18

An industry's key success factors can always be deduced by asking what factors
A) are a function of market share, entry barriers, and economies of scale, degree of vertical integration, and industry profitability that are advantageous.
B) vary according to whether an industry has high or low long-term attractiveness.
C) such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage.
D) can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies.
E) depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

Accepted Answer

Key success factors are those factors that are crucial to the success of an industry and which need to be carefully considered by firms within that industry. These factors may include things like product attributes, service characteristics, resources, and competitive capabilities. Understanding these key success factors is important for firms looking to compete in a particular industry, as it can help them to focus their efforts on the areas that are most important in order to gain a competitive advantage. Option A is incorrect because while market share and economies of scale can be important factors, they are not always the most important or advantageous ones. Option B is incorrect because it suggests that key success factors depend solely on whether an industry is attractive or not, which is not always the case. Option D and E are incorrect because they both rely on studying other firms' strategies instead of focusing on the factors that are most important for success in the industry as a whole.

Question 19

With the aid of a strategic group map, one can
A) identify easily the entry and exit barriers for each strategic group.
B) pinpoint precisely which firms are in profitable strategic groups and which are not.
C) identify which competitive forces are strong and which are weak.
D) measure accurately whether across-group rivalry is stronger than within-group rivalry, and vice versa.
E) reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

Accepted Answer

A strategic group map helps to reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive. It does not provide information on entry and exit barriers, identify profitable strategic groups, measure rivalry strength accurately, or pinpoint which competitive forces are strong or weak.

Question 20

The payoff of good scouting reports on rivals is an improved ability to
A) anticipate what moves rivals are likely to make next.
B) determine which rivals are in the best strategic group.
C) figure out how many key success factors a rival has.
D) determine whether a rival is gaining or losing market share.
E) determine whether a rival has the best strategy and is the industry leader.

Accepted Answer

Good scouting reports on rivals can help a company anticipate what moves their rivals are likely to make next, giving them a competitive edge and the ability to prepare and respond accordingly.

Quiz 3: Evaluating a Companys External Environment

The concept of strategic groups is relevant to industry and competitive analysis because

Which of the following pairs of variables are LEAST likely to be useful in drawing a strategic group map?

Strategic group mapping is a visual technique for displaying

To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's

A rival's strategic moves and countermoves are

Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT

In mapping, strategic groups

The key success factors in an industry

Competitive intelligence can be gleaned from

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

One of the things that can be gleaned from a strategic group map of industry rivals is

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because

Angela and Jeff are co-owners of five specialty baking stores in their region. Which of the following questions would NOT help them to predict the next strategic moves and countermoves of their rivals?

Not all positions on a strategic group map are equally attractive because

Strategic group map analysis does NOT entail drawing conclusions about

An industry contains one strategic group when all sellers

The extent to which firms are meeting objectives suggests they

An industry's key success factors can always be deduced by asking what factors

With the aid of a strategic group map, one can

The payoff of good scouting reports on rivals is an improved ability to