Competition tends to be more intense among firms within a strategic group than between strategic groups.

41.	Competition tends to be more intense among firms within a strategic group than between strategic groups.    TRUE Strategic groups are clusters of firms that share similar strategies. Rivalry tends to be greater among firms that are alike.

AACSB: Analytic Blooms: Understand Learning Objective: 02-07 The concept of strategic groups and their strategy and performance implications. Level of Difficulty: 2 Medium Topic: The Competitive Environment

42.

The same environmental trend or event may have a very different impact on different strategic groups within the same industry.    TRUE Strategic groups are helpful in thinking through the implications of each industry trend for the strategic group as a whole. Such analysis can help in making predictions about industry evolution. A sharp increase in interest rates, for example, tends to have less impact on providers of higher-priced goods (e.g., Porsches) than on providers of lower-priced goods (e.g., Chevrolet Cobalt) whose customer base is much more price sensitive.

AACSB: Analytic Blooms: Understand Learning Objective: 02-07 The concept of strategic groups and their strategy and performance implications. Level of Difficulty: 2 Medium Topic: The Competitive Environment

43.

The use of the strategic group concept is generally not helpful in charting the future directions of the strategies of a firm.    FALSE Strategic groupings help chart the future directions of the strategies of a firm. Arrows emanating from each strategic group can represent the direction in which the group (or a firm within the group) seems to be moving. If all strategic groups are moving in a similar direction, this could indicate a high degree of future volatility and intensity of competition.

AACSB: Analytic Blooms: Understand Learning Objective: 02-07 The concept of strategic groups and their strategy and performance implications. Level of Difficulty: 2 Medium Topic: The Competitive Environment

44.	The strategic groups in the worldwide automobile industry have been very stable and unchanging in recent years.    FALSE The auto market has been very dynamic and competition has intensified in recent years. Many firms in different strategic groups compete in the same product markets.

AACSB: Analytic Blooms: Understand Learning Objective: 02-07 The concept of strategic groups and their strategy and performance implications. Level of Difficulty: 2 Medium Topic: The Competitive Environment