Deck 11: Portfolio Analysis and Strategic Market Planning

Question 1

Diversification decreases the likelihood that a firm's overall performance will be consistent.

Answer 1

False

Question 2

The strategic market plan called "optimize position" is an offensive strategy often used in the early stages of the product life cycle.

Answer 2

False

Question 3

A portfolio analysis model typically has two dimensions of performance: a revenue model and a cost model.

Answer 3

False

Question 4

Which of the following is considered a competitive environment factor that influences a market's attractiveness?

A)buyer power
B)growth rate
C)price rivalry
D)channel access
E)sales requirements

Question 5

In the long run,a growth-oriented market strategy will shift from an offensive strategic market plan to a defensive strategic market plan.

Question 6

Potential strategies used to implement offensive strategic marketing plans are protect position,optimize position,and monetize strategy.

Question 7

Calculate the total sales of a product if the market demand for the product now in the early growth stage of the product life cycle is 2 million units annually,and the product captures 15 percent of this demand with a price of $50 per unit.

A)$100 million
B)$15 million
C)$30 million
D)$50 million
E)$75 million

Question 8

A strategic market plan sets the direction and provides guidelines for resource allocation.

Question 9

The marketing mix strategy involves tactics with respect to the product,price,promotion,and service.

Question 10

Calculate the net marketing contribution of a product if the market demand for the product is 4 million units annually,and the product captures 10 percent of this demand with a price of $50 per unit and a cost of $40 per unit.The total of marketing and sales expenses is $2.5 million.

A)$3 million
B)$2.5 million
C)$2 million
D)$1.5 million
E)$1 million

Question 11

Product-markets with low indexes for both market attractiveness and competitive position have the strongest portfolio position and the best opportunities for profit performance.

Question 12

Which of the following is considered a market force factor that influences a market's attractiveness?

A)buyer power
B)number of competitors
C)price rivalry
D)channel access
E)sales requirements

Question 13

A marketing mix strategy is a long-term strategy with a 3- to 5-year time horizon and specific performance objectives.

Question 14

The strategic market plan of "investing to improve position" is an offensive strategic market plan to invest marketing resources to grow the market.

Question 15

Factors that shape a market's attractiveness are market forces,competitive environment,and market access.

Question 16

Exiting a product-market is simply a way to cut losses quickly and reallocate marketing resources to more productive endeavors.

Question 17

The dimensions of competitive position are differentiation position,cost position,and marketing position.

Question 18

A portfolio analysis is an evaluation of a business,product,or market with respect to market attractiveness and competitive position as an aid in identifying the most appropriate strategic plan.

Question 19

The relative market share of a business is equal to the ________.

A)product of the business's market demand and market share
B)product of the business's market demand,market share,and product price
C)ratio of the business's market share to its gross profit
D)difference between the business's market share and its marketing and sales expenses
E)ratio of the business's market share to the total share of its three largest competitors

Question 20

The strategic market planning process begins with a careful assessment of market attractiveness and competitive position for each product-market that a business serves or is considering serving.

Question 21

The three dimensions of competitive position are: a differentiation position,a cost position,and a ________.

A)marketing position
B)buyer power position
C)price rivalry position
D)revenue position
E)channel access position

Question 22

Offensive portfolio strategies differ from defensive portfolio strategies in that offensive portfolio strategies ________.

A)add significantly to short-run cash flow
B)are more growth oriented
C)protect important strategic market positions
D)are less likely to be used in attractive markets
E)hinder long-run profit performance

Question 23

Which of the following is a defensive strategic market plan?

A)a new market entry strategy
B)an improve position strategy
C)a harvest strategy
D)a vertical integration strategy
E)a horizontal integration strategy

Question 24

If the total factor-weighted attractiveness scores for market forces,competitive environment,and market access are 10,24,and 35,respectively,what is the market attractiveness index?

A)-3
B)1
C)23
D)49
E)69

Question 25

Clarence Inc.conducts a market research,which reveals that it has a product quality of 40% relative importance and the attractiveness rating of this factor is 60 (i.e. ,attractive).The firm identifies that its service quality is of 30% relative importance and scores a rating of 80 (i.e. ,somewhat attractive);and brand image/reputation is of 30% relative importance and scores a rating of 80 (i.e. ,attractive).The firm has a differentiation advantage factor importance of 50%.Calculate the overall attractiveness score for the assessed opportunity.

A)36
B)74
C)110
D)146
E)220

Question 26

The three dimensions of competitive position are ________.

A)an actual position,a past position,and a target position
B)an aggressive strategy position,a passive strategy position,and a neutral strategy position
C)a target position,a perceived position,and a real position
D)a differentiation position,a cost position,and a marketing position
E)a revenue position,a sales position,and a brand position

Question 27

Which of the following is an offensive strategic market plan?

A)a protect position strategy
B)an optimize position strategy
C)a monetize strategy
D)a new market entry strategy
E)a divest strategy

Question 28

Which of the following is a defensive strategy that strives to maximize profits and cash flow as a business slowly exits a product-market?

A)a harvest strategy
B)a vertical integration strategy
C)a horizontal integration strategy
D)a monetize strategy
E)a divest strategy

Question 29

A monetize strategy differs from a harvest strategy in that a monetize strategy ________.

A)is a defensive strategy
B)manages prices and marketing resources in a way that maximizes cash flow without exiting the market
C)is used for maximizing profits and cash flow as a business slowly exits a product-market
D)protects an attractive market position in which the business dominates with respect to competitive position
E)is a strategy for exiting a market by selling or closing down the business or eliminating the product

Question 30

The offensive strategic market plan to invest marketing and sales resources to expand the market or a product's position in a market is known as ________.

A)a divest strategy
B)a protect position strategy
C)an invest to grow strategy
D)a harvest investment strategy
E)a monetize strategy

Question 31

Which of the following is considered a market access factor that influences a market's attractiveness?

A)market size
B)growth rate
C)buyer power
D)channel access
E)price rivalry

Question 32

Within a company's competitive position,which of the following is a part of the company's differentiation advantage?

A)product quality
B)transaction cost
C)market share
D)marketing expenses
E)distribution

Question 33

Which of the following is true about an optimize position strategy?

A)It is used for maximizing profits and cash flow as a business slowly exits a product-market.
B)It is usually used by a business when the growth potential is limited and competitive position is set.
C)It is an offensive strategic market plan that seeks to improve a business's competitive position in an attractive segment of the market.
D)It involves making a conscious effort to increase customer base in order to reach a more profitable level of business.
E)It requires a large investment in marketing resources.

Question 34

An optimize position strategy differs from a harvest strategy in that an optimize position strategy ________.

A)involves a conscious effort to reduce the customer base in order to reach a more profitable level of business
B)is used to protect an attractive market position in which the business dominates with respect to competitive position
C)is an offensive strategic market plan that seeks to improve a business's competitive position in an attractive segment of the market
D)is used to maximize profits and cash flow as a business slowly exits a product-market
E)is used for exiting a market by selling or closing down the business or eliminating the product

Question 35

Maxim Computer has a 10 percent of a $250 billion market.Maxim is the low-cost leader and realizes a 20% margin on sales,and marketing,sales,and administrative expenses equal 10% of sales.What are Maxim's sales revenues?

A)$250 billion
B)$25 billion
C)$5 billion
D)$2.5 billion
E)$500 million

Question 36

Maxim Computer has 10 percent of a $250 billion market.Maxim is a low-cost leader and realizes a 20% margin on sales,and marketing,and administrative expenses equaling 10% of sales.What is Maxim's gross profit?

A)$250 billion
B)$25 billion
C)$5 billion
D)$2.5 billion
E)$500 million

Question 37

Which type of strategy is best utilized for exiting a market by selling or closing down the business or eliminating the product?

A)a harvest strategy
B)a monetize strategy
C)a horizontal integration strategy
D)a vertical integration strategy
E)a divest strategy

Question 38

Which of the following is a defensive strategy that often occurs in the late and mature stages of the product life cycle when growth potential is limited and competitive position is set?

A)an optimize position strategy
B)a vertical integration strategy
C)an invest to improve position strategy
D)an invest to grow strategy
E)a new market entry strategy

Question 39

Which of the following is true about monetize strategy?

A)It is an offensive strategy that is used to enter new attractive markets.
B)It is a defensive strategy used in less attractive markets.
C)It is a defensive strategy for exiting a market by selling or closing down the business.
D)It seeks to improve a business's competitive position in an attractive segment of the market.
E)It is used to protect an attractive market position in which the business dominates with respect to competitive position.

Question 40

Clarence Inc.conducts a market research,which reveals that its market size is of 40% relative importance and the attractiveness rating of this factor is 80 (i.e. ,attractive).It identifies that its market growth is of 30% relative importance and scores a rating of 60 (i.e. ,somewhat attractive);and its buyer power is of 30% relative importance and scores a rating of 40 (i.e. ,somewhat unattractive).The firm has a market forces factor importance of 30%.Calculate the overall market attractiveness score for the assessed opportunity.

A)18.6
B)54
C)60
D)62
E)207

Question 41

MINI-CASE
Aster Inc.is an American firm that manufactures and markets cell phones for sale in discount stores and other retail settings.The firm also sells cell phone accessories.Aster Inc.conducted an analysis of its competitive advantage for one of its product-markets and conducted research to learn the following information:

Mini-Case Question.If differentiation advantage and cost advantage are both rated at 40% of total importance and marketing advantage is weighted much lower at 20%,what is Aster Inc.'s competitive position index for this product-market?

A)29.6
B)18.4
C)6.8
D)54.8
E)45.7

Question 42

MINI-CASE
Aster Inc.is an American firm that manufactures and markets cell phones for sale in discount stores and other retail settings.The firm also sells cell phone accessories.Aster Inc.conducted an analysis of its competitive advantage for one of its product-markets and conducted research to learn the following information:

Mini-Case Question.Aster Inc.identifies that the market attractiveness index for the cell phone market is equal to 25.The firm decides to adopt a strategy of minimizing investment in its business,and striving for maximum cash flow from its market position.Aster Inc.aims to manage prices and marketing resources in a way that maximizes its cash flow without exiting the market.Aster Inc.is considering on using which of the following strategic market plans?

A)an invest to grow strategy
B)a monetize strategy
C)an optimize position strategy
D)a harvest strategy
E)a disintermediation strategy

Question 43

The strategic marketing planning process requires a careful assessment of market attractiveness and competitive position.Briefly describe what is involved in this assessment and identify three main factors for each.

Question 44

Name and describe three offensive strategic market plans and three defensive strategic market plans.

Question 45

Offensive strategic market plans are strategies that ________.

A)have a 1-year time horizon
B)are ineffective at growing sales revenue
C)reduce the long-run share position
D)limit short-run profit performance
E)result in short-term profits without any additional investment

Question 46

A ________ is a long-term strategy with a 3- to 5-year time horizon and specific performance objectives.

A)tactical marketing plan
B)workhorse plan
C)marketing mix strategy
D)vertical integration strategy
E)strategic market plan

Question 47

MINI-CASE
Aster Inc.is an American firm that manufactures and markets cell phones for sale in discount stores and other retail settings.The firm also sells cell phone accessories.Aster Inc.conducted an analysis of its competitive advantage for one of its product-markets and conducted research to learn the following information:

Mini-Case Question.After extensive market research,Aster Inc.decides to enter the household appliances market.The firm launches a line of consumer electronics products,such as ovens and coffee grinders.Aster Inc.is most likely to be using which of the following strategies?

A)a vertical integration strategy
B)a harvest strategy
C)a monetize position strategy
D)a diversification strategy
E)a horizontal integration strategy

Question 48

Which of the following is true about portfolio diversification?

A)It reduces performance stability.
B)It increases dependence on a single product.
C)It allows a business to take advantage of offsetting product life cycles.
D)It restricts a business to a single market.
E)It reduces opportunity for growth.

Question 49

Which of the following statements is true?

A)Offensive strategic market plans require investment for growth,which limits long-run profit performance,but does not limit sales revenue.
B)Defensive strategic market plans promote short-run profit performance but are not that effective in growing sales revenue.
C)In the long run,all market strategy will shift from an offensive strategic market plan to a growth-oriented plan.
D)Offensive strategic market plans are geared to deliver above-average performance in the areas of sales growth,share position,and improved short-run profits.
E)Defensive strategic market plans are not geared towards the protection of market share.

Question 50

Which of the following is true about defensive portfolio strategies?

A)They are more growth oriented than offensive portfolio strategies.
B)They aim to protect important strategic market positions.
C)They are most commonly implemented in attractive markets by businesses with a weak competitive position.
D)They are most commonly implemented in unattractive markets by businesses with a high competitive position index.
E)They aim to reduce short-run cash flow and profit performance,to promote growth in the long-run.

Question 51

Which of the following strategies is referred to as the "workhorse" that has to succeed in order for the strategic market plan to achieve both short- and long-run performance objectives?

A)a harvest strategy
B)a marketing mix strategy
C)a defensive strategy
D)an offensive strategy
E)a monetizing strategy

Question 52

Maxim Computer has a 10 percent of a $250 billion market.Maxim is the low-cost leader and realizes a 20% margin on sales,and marketing,sales,and administrative expenses equaling 10% of sales.What is Maxim's net marketing contribution?

A)$250 billion
B)$25 billion
C)$5 billion
D)$2.5 billion
E)$500 million

Question 53

Under a defensive strategic market plan,calculate the market demand of a particular product that generates sales revenue of $32 million at a market share of 15 percent.

A)$480 million
B)$4.8 million
C)$46.9 million
D)$213.3 million
E)$320 million

Question 54

Under a defensive strategic market plan,a particular product generates sales revenue of $32 million at a market share of 15 percent.If the business generates a gross profit of $7 million,calculate the percent margin on sales realized by the business.

A)21.8%
B)46.8%
C)10.5%
D)38.6%
E)15%

Question 55

Which of the following is true about a strategic market plan?

A)It is a short-term marketing strategy.
B)It is referred to as tactical marketing strategy.
C)It lacks specific performance objectives.
D)It has a 1-year time horizon.
E)It has a 3- to 5-year time horizon.

Question 56

Under a defensive strategic market plan,calculate the market share of a company that generates sales revenue of $50 million in a market where the total demand is $493 million.

A)5.6%
B)10.14%
C)25%
D)32.3%
E)5.89%

Question 57

In the long run,a growth-oriented marketing strategy will shift from a(n)________ strategic market plan to a(n)________ strategic market plan.

A)growth;hold
B)hold;growth
C)offensive;defensive
D)investment;tactical
E)harvest;monetizing

Question 58

Defensive strategic market plans are strategies that ________.

A)have a 3- to 5-year time horizon
B)require investment in order to produce sales growth
C)are not particularly effective at growing sales revenue
D)limit short-run profit performance
E)improve the long-run share position

Question 59

A marketing mix strategy differs from a strategic market plan in that a marketing mix strategy ________.

A)is a long-term strategy
B)needs to be reviewed each year
C)has specific performance objectives
D)has a 3- to 5-year time horizon
E)has a 5-to 10-year time horizon

Question 60

Steven & Meyer Inc.is an women's cosmetics manufacturing firm based in California.The firm sells its cosmetic products under the brand name GentleCare.After extensive market research,the firm launches a new line of household care products under the brand name White Oleander.The firm aims to increase the likelihood that its overall performance will be consistent because adverse conditions in one product-market will be offset by favorable conditions in the other.In this example,Steven & Meyer Inc.is using which of the following strategies?

A)a vertical integration strategy
B)a harvest strategy
C)a monetize position strategy
D)a diversification strategy
E)a horizontal integration strategy