Deck 3: Strategic Planning for Competitive Advantage

Question 1

A diversification strategy entails increasing sales by introducing new products into new markets.

Answer 1

True

Question 2

A competitive advantage is some unique aspect of a firm's offering,or of the firm itself,that causes target customers to patronize the firm rather than its competition.

Answer 2

True

Question 3

Niche competitive advantages are quite common.

Answer 3

True
The text lists several examples of how companies have created niche competitive advantages.

Question 4

A firm's mission statement should answer the question,"What products do we produce best?"

Question 5

The portfolio matrix is a tool for allocating resources among products or strategic business units on the basis of relative market share and degree of innovation.

Question 6

Berkshire Hathaway Inc.,a large property insurance company,owns a large chain of jewelry stores and has recently purchased Russell Corporation,a manufacturer of sporting goods.Berkshire Hathaway uses a market penetration strategy.

Question 7

A production costs analysis could be a part of a company's SWOT analysis.

Question 8

Marketing strategy involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.

Question 9

The Home Depot's purchase of Hughes Supply Company allows it to better meet the needs of its current business customers.This is an example of product development.

Question 10

The development of a target market strategy begins with a marketing audit.

Question 11

The manufacturer of Macho brand martial arts products was implementing a strategic plan when it sponsored a local karate tournament for teenagers.

Question 12

When the Internet auction company eBay opened a version of the company called eBay France for the French market,it was an example of market penetration.

Question 13

Environmental scanning entails the collection and analysis of information about factors that may affect the organization as well as the identification of market opportunities and threats.

Question 14

The company's objective is to increase sales next year.This is an example of a well-stated objective.

Question 15

To be useful,marketing objectives should be realistic,measurable,time specific,and based on sales.

Question 16

The marketing plan is a written document that acts as a guidebook of marketing activities for the marketing manager.

Question 17

Developing a cost competitive advantage can enable a firm to deliver superior customer value.

Question 18

When a florist shop begins to sell burial caskets to its customers,it is engaged in product development.

Question 19

A market penetration strategy entails the creation of new products for current customers.

Question 20

As marketers gain more experience in marketing a product,costs tend to decrease,which is an example of the maturity effect.

Question 21

With hospitals nationwide facing budget cuts and slimmer profit margins,Dekalb County's Medical Center decided to cash in on one of the most consistently profitable services--delivering babies.It initiated a three-year project to build a $55 million state-of-the-art women's center with 18 labor and delivery suites.When the hospital decided to commit its resources to obstetrics,it was engaging in:

A) benchmarking
B) alternative problem solving
C) strategic planning
D) portfolio evaluation
E) tactical control

Question 22

Heinz has announced that they plan to grow the company through an accelerated push into emerging markets such as China,Indonesia,and India in the next ten years.This is an example of:

A) tactical objectifying
B) contingency plan
C) strategic planning
D) marketing implementation
E) horizon planning

Question 23

The four Ps of the marketing mix are product,planning,promotion,and price.

Question 24

Which of the following is a type of strategic alternative that tries to increase market share among existing customers?

A) Vertical integration
B) Product penetration
C) Divestment
D) Horizontal integration
E) Market penetration

Question 25

Market penetration occurs when:

A) a supermarket adds a new store
B) a U.S.-based company begins to sell its products in China
C) Motown records sells DVDs to Walmart
D) Yoplait sends yogurt coupons to its existing customers
E) 3M distributes Breathe Right nasal strips in Europe

Question 26

_____ is the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities.

A) Tactical management
B) The market audit
C) Functional planning
D) Environmental scanning
E) Strategic planning

Question 27

Subgroups of a single business or collection of related businesses within a larger organization are referred to as:

A) strategic marketing organizations
B) strategic subgroups
C) market segments
D) business segments
E) strategic business units

Question 28

Typically,the development of the marketing mix starts with determining the promotion for a product.

Question 29

A strategic business unit (SBU):

A) competes with the same companies as the other SBUs in the parent organization
B) shares the same mission with all the other SBUs in the parent organization
C) controls its business independent of other SBUs in the organization
D) usually benefits from the combined corporate raw materials purchases
E) still has strategic planning performed back at corporate headquarters

Question 30

_____ is a strategy of increasing market share for present products in existing markets.

A) Market penetration
B) Product development
C) Market development
D) Diversification
E) Product penetration

Question 31

Until spun off in 2007,Kraft was part of Altria Group,Inc.Kraft had its own management team,mission statement,and target markets different from Altria.Kraft was a _____ of Altria.

A) product market niche
B) diversified division
C) heterogeneous element
D) strategic alliance
E) strategic business unit

Question 32

A marketing audit helps management allocate marketing resources efficiently.

Question 33

Chrysler has a financial unit that is responsible for vehicle leases to consumers.It has a distinct mission,control over its resources,and plans independent of the other divisions of Chrysler.This financial unit is an example of a(n):

A) organizational level
B) SWOT
C) secure business unit
D) business sales unit
E) strategic business unit

Question 34

A popular technique for managing a large organization with different technologies and markets is to divide it into:

A) strategic business units
B) different technologies
C) strategic target markets
D) design matrices
E) tactical segments

Question 35

Strategic plans require:

A) long-term resource commitments
B) a change in organizational structure
C) the addition of new personnel
D) new product development
E) changes in prices

Question 36

Yildiz Holding of Turkey purchased Godiva Chocolates from Campbell's Soup Company.Campbell's sold one of its:

A) strategic business units (SBUs)
B) strategic alliances
C) action programs
D) transactional units
E) synergistic divisions

Question 37

Since gas prices have soared and consumers have cut back on their spending on new trucks and SUVs,Ford Motor Corporation is transforming several of its plants to create small cars.Ford has engaged in:

A) benchmarking
B) tactical resource realignment
C) alternative selection
D) portfolio evaluation
E) strategic planning

Question 38

The SBU acronym refers to:

A) stock in business units
B) strategic business unit
C) standard business utilization
D) strategic barter units
E) samples by units

Question 39

Strategic planning is most effective when managers view it as an annual exercise.

Question 40

The most critical element for successful strategic planning is top management's support and participation.

Question 41

The marketing of new organic cotton tee-shirts for Life is good's existing customers would be an example of a _____ strategy.

A) market development
B) product development
C) market penetration
D) product penetration
E) diversification

Question 42

Kraft Foods created a magazine full of recipes and coupons for customers as well as a Web site with product and recipe information.The goal was to get current customers to purchase more of Kraft's products.These activities are representative of a _____ strategy.

A) diversification
B) product development
C) market development
D) market penetration
E) product penetration

Question 43

The _____ is a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate.

A) market audit
B) portfolio matrix
C) experience matrix
D) market development analysis
E) market opportunity analysis

Question 44

In the past,PajamaGram marketed pajamas only to women.Now the company offers pajamas for men and children.This is an example of a _____ strategy.

A) market development
B) product development
C) market penetration
D) product penetration
E) divestment

Question 45

The company that manufactures Molson beer,which is typically consumed by males,launched an alcoholic lemonade beverage to attract more females.This launch of a new product to attract a new market for Molson's products is an illustration of a _____ strategy.

A) market development
B) market penetration
C) product penetration
D) product development
E) diversification

Question 46

Russell Athletic,which is part of Berkshire Hathaway,Inc.,is a market leader in sports apparel,an industry that is growing rapidly.Russell Athletic is an example of a(n)_____ according to the portfolio matrix.

A) star
B) question mark
C) problem child
D) exclamation point
E) widow

Question 47

Yard Whimzees,a Statesboro,Georgia,sign business,began by making wooden signs for residential use to announce births,anniversaries,and such.The company then turned to the business market by making signs for businesses.Creating signs for a new market is an implementation of a _____ strategy.

A) market development
B) market penetration
C) product penetration
D) product development
E) diversification

Question 48

_____ is a strategy that attempts to attract new customers to existing products.

A) Product development
B) Market development
C) Market penetration
D) Product penetration
E) Diversification

Question 49

LVMH,a maker of luxury goods,has expanded its products offerings into China,Russia,India,and the Middle East.This exemplifies a _____ strategy.

A) market development
B) product development
C) market penetration
D) diversification
E) product expansion

Question 50

Orange growers in Florida have lost millions of dollars due to hurricanes.As a result,some growers have decided to bulldoze their orange groves and put in freshwater lakes for raising shrimp,a product that has a strong popularity and is more weather resistant.Former orange growers who are now raising shrimp are pursuing a _____ strategy.

A) market penetration
B) product development
C) diversification
D) market development
E) product penetration

Question 51

Kraft introduced Philadelphia Ready-To-Eat Cheesecake Filling for those who do not have time to make cheesecake in the traditional manner.This is an example of a _____ strategy.

A) diversification
B) market development
C) product development
D) divestment
E) product penetration

Question 52

The Hallmark Company was inspired by the popularity of Jan Karon's best-selling novels about Mitford,a fictional town in the mountains of North Carolina,to develop a new line of products for Hallmark Gold Crown Stores nationwide.Hallmark created hundreds of Mitford-inspired products that authentically bring "the little town with the big heart" into tangible reality.The products include greeting cards,partyware and gift wrap,mugs,and puzzles for Hallmark's existing customers.Hallmark used a _____ strategy.

A) market development
B) market penetration
C) product penetration
D) product development
E) diversification

Question 53

Clay Market began as a retailer of terra-cotta pots and garden figures imported from Turkey and Mexico.It has since added Turkish rugs and fabrics,leather-trimmed purses,and a line of women's clothes for its customers.These activities are indicative of a _____ strategy.

A) vertical integration
B) market penetration
C) diversification
D) product development
E) market development

Question 54

For most American consumers,the brand name Benetton brings to mind a retail clothing store that carries many products that bear the Benetton brand.But Edizone Holding,which also owns a chain of restaurants,several toll roads in Italy,and a telecommunications company,holds the Benetton Group.The list of the company's holdings indicates that the company's managers believe in growth through:

A) market penetration
B) diversification
C) product development
D) market development
E) market integration

Question 55

Pure Digital Technologies created the Flip,a digital camera priced around $150.It filled a gap between expensive digital cameras and webcams.The Flip plugs straight into a computer,and the video can easily be viewed and shared instantly.Creating a new product for a new market is called _____.

A) divestment
B) segment development
C) target marketing
D) diversification
E) directed growth

Question 56

_____ is the strategy of increasing sales by introducing new products into new markets.

A) Product penetration
B) Product development
C) Market penetration
D) Market development
E) Diversification

Question 57

In order to expand its sales into the U.S.market,BRL,an Australia-based winemaker,agreed to a merger with a U.S.-based wine distribution company.According to Ansoff's strategic opportunity matrix,BRL would be implementing a _____ strategy.

A) diversification
B) market development
C) product development
D) divestment
E) product penetration

Question 58

Which of the following categories in the portfolio matrix is a market leader and growing fast?

A) Star
B) Meteor
C) Cash cow
D) Shiner
E) Top dog

Question 59

All of the following are strategic alternatives that match products with markets EXCEPT:

A) product development
B) market penetration
C) product penetration
D) diversification
E) market development

Question 60

_____ is a marketing strategy that creates new products for present markets.

A) Product penetration
B) Market penetration
C) Product development
D) Market development
E) Diversification

Question 61

By defining its business as "printing books" instead of "empowering imaginations," a children's book publishing company would more than likely experience:

A) market synergy
B) product entropy
C) market harvesting
D) nonspecific strategic planning
E) marketing myopia

Question 62

PepsiCo's annual report has the following statement: "Our business is to increase the value of our shareholder's investment.We do this through sales growth,cost controls,and wise investment of resources.We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe,wholesome,economically efficient,and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity." This statement is an example of PepsiCo's:

A) marketing mix strategy
B) quantifiable goal
C) mission statement
D) statement of economic potential
E) market segmentation strategy

Question 63

Earl is starting a new bank.Before the opening day,Earl had a meeting with all employees.He discussed their mission,defined objectives for the bank for the coming years,and shared who their target market is.He talked about their product offerings and where their future branches would be located.Earl is sharing the bank's:

A) reengineering
B) hierarchical restructuring
C) financial analysis
D) marketing plan
E) strategic contingency planning

Question 64

All of the following are elements of the marketing plan EXCEPT:

A) the business mission statement
B) situation analysis
C) the target market strategy
D) the marketing mix
E) portfolio analysis

Question 65

Before Heinz sold its 9-Lives brand cat food unit,the company identified the product as having a low market share in a high-growth market.The portfolio matrix would classify 9-Lives as a(n):

A) star
B) exclamation point
C) problem child
D) cash cow
E) widow

Question 66

Tide laundry detergent is the market leader,but overall industry growth is low in this market.Tide would be classified as a _____ in the portfolio matrix.

A) star
B) cash cow
C) problem child
D) question mark
E) dog

Question 67

John R.Harland Company is best known for printing checks.Its Financial Solutions division develops software for mortgage companies and is currently producing much less than the desired level of profitability in a high-growth industry.According to the portfolio matrix,Harland would label its Financial Solutions division as a(n):

A) widow
B) exclamation point
C) problem child
D) star
E) dog

Question 68

_____ is the process of anticipating events and determining strategies to achieve organizational objectives.

A) Planning
B) Portfolio evaluation
C) Forecasting
D) Implementation
E) Evaluation

Question 69

John R.Harland Company is best known for printing checks.Its Financial Solutions division develops software for mortgage companies,which is a growing industry.This division is currently not producing at the desired level of profitability,but Harland plans to turn the division into a success by acquiring other companies that develop similar software.To accomplish this,Harland will be engaging in a _____ strategy.

A) harvesting
B) diversification
C) divesting
D) holding
E) building

Question 70

All of the following are categories used in the Boston Consulting Group's portfolio matrix EXCEPT:

A) cash cows
B) stars
C) problem children
D) meat eaters
E) dogs

Question 71

The focus of an organization's mission statement should be on:

A) the products it wishes to sell
B) the market it wishes to serve
C) its social responsibilities
D) the desires of government regulators
E) technologies it understands well

Question 72

Marketing plans should be written to do all of the following EXCEPT:

A) compare actual and expected performance
B) provide clearly stated activities
C) create common goals for employees to work toward
D) allow managers to enter the marketplace with an awareness of possibilities and problems
E) control the elements of the external marketing environment

Question 73

A business unit that usually generates more than it needs to maintain its market share is called a(n)_____ in the portfolio matrix.

A) star
B) cash cow
C) problem child
D) dog
E) independent

Question 74

A statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions is known as a(n):

A) business audit
B) marketing plan
C) mission statement
D) environmental focus
E) portfolio matrix

Question 75

All of the following are basic strategies resulting from a portfolio analysis EXCEPT:

A) harvest
B) build
C) hold
D) divest
E) milk

Question 76

The _____ answers the question,"What business are we in,and where are we going?"

A) mission statement
B) financial statement
C) situation analysis
D) market strategy
E) strategic plan

Question 77

In the portfolio matrix,a business unit that has low growth potential and a small market share is called a(n):

A) widow
B) problem child
C) cash cow
D) dog
E) bust

Question 78

A written document that acts as a guidebook of marketing activities for the marketing manager is known as the:

A) strategy document
B) marketing plan
C) vision statement
D) mission statement
E) strategic plan

Question 79

Which of the following represents a business unit that shows rapid growth but poor profit margins?

A) Star
B) Cash cow
C) Problem child
D) Loss leader
E) Dog

Question 80

_____ occurs when a business is defined in terms of goods and services rather than in terms of the benefits customers seek.

A) Synergy
B) Tunnel vision
C) Narrowcasting
D) Unempowerment
E) Marketing myopia