Firms that compete within the same strategic group in a competitive market generally experience which of the following?

• A. Significantly different cost structures and demand conditions
• B. Similar competitive pressures and market performance
• C. No rivalry due to product differentiation
• D. Exclusive access to unique resources unavailable to other groups

Answer: (B)

Verified step by step guidance

1. Understand the concept of a strategic group: It refers to a set of firms within an industry that follow similar strategies or have similar characteristics, such as cost structures, product offerings, or market segments.
2. Recognize that firms within the same strategic group face similar external conditions, including competitive pressures and market demand, because they target similar customers and operate under comparable constraints.
3. Analyze why significantly different cost structures and demand conditions are unlikely within the same strategic group, as these differences typically separate firms into different groups.
4. Consider the role of rivalry: Firms in the same strategic group often compete intensely because their products or services are close substitutes, which increases competitive pressures rather than eliminating rivalry.
5. Conclude that firms in the same strategic group generally experience similar competitive pressures and market performance, as they share comparable resources, strategies, and market environments.