Question

A) Defend or refute the statement: "Strategic groups do not impact competitive rivalry within an industry." B) Explain mobility barriers between strategic groups. Refer to the example of the U.S. airline industry.

Answer 1

A) Defend or refute the statement: "Strategic groups do not impact competitive rivalry within an industry."

This statement is incorrect. Firms in the same strategic group tend to follow a similar strategy.Companies in the same strategic group, therefore, are direct competitors. The rivalry among firms ofthe same strategic group is generally more intense than the rivalry between strategic groups: intra-group rivalry exceeds inter-group rivalry. The number of different business strategies pursued withinan industry determines the number of strategic groups in that industry

B) Explain mobility barriers between strategic groups. Refer to the example of the U.S. airline industry.

Mobility barriers are industry-specific factors that separate one strategic group from another.Although some strategic groups tend to be more profitable and therefore more attractive than others, mobility barriers restrict movement between groups.For example, the difficulty of securing landing slots at international airports around the world acts as a mobility barrier between those airlines that use the hub-and-spoke operational model to offer international routes and those that are point-to-point airlines