The Concept of Strategic Groups Is Relevant to Industry and Competitive

question 112

Multiple Choice

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 its 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.

---

Definitions:

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Economic Order Quantity

A calculation used to determine the optimal order quantity that minimizes the total inventory costs, including holding and ordering costs.

Inventory Policy

The set of guidelines a company follows to determine how much inventory should be kept on hand to meet customer demand and manage supply chain efficiency.

Quantity Discounts

Pricing incentives granted to purchasers that buy in large volumes, typically reducing the cost per unit.