Deck 2: Strategic Planning and Competitive Advantage

Question 1

A premise of the Boston Consulting Group model states which of the following?

A) Diversification strategies can be risky when firms enter unfamiliar markets,even with little or no competition in those markets segments.
B) The cash generated from cash cows should be allotted to SBUs considered to be question marks and dogs,instead of stars.
C) Management must find a balance among the SBUs that yields the overall organization's desired growth and profits with an acceptable level of risk.
D) Companies must rely on new,unfamiliar assets to develop the type of breakthrough decisions that would determine their sustainability in the future.

Answer 1

C

Question 2

Choqlate King Inc.is a large company that manufactures and sells chocolate bars.It plans to adopt a product development strategy.In this case,Choqlate King will:

A) focus on attracting new customers and retain existing ones.
B) offer chocolates at competitive prices.
C) introduce a product line of low-calorie chocolates.
D) use existing assets to provide added convenience to existing customers.

Answer 2

C

Question 3

Magnira Inc.plans to implement a market penetration strategy to increase its market share.According to Ansoff's strategic opportunity matrix,which of the following scenarios is most likely to happen?

A) It will try to attract new customers to its products.
B) It will try to increase its market share among existing customers.
C) It will create new products for its existing customers.
D) It will move away from its core capabilities and diversify its business.

Answer 3

B

Question 4

Fourlotts Inc.is a renowned technological firm.It manages many strategic business units (SBUs)in which each SBU:

A) has its own return on investment.
B) shares the same goals and employs the same strategies as Fourlotts Inc.
C) plans collaboratively with Fourlotts Inc.'s other SBUs.
D) refrains from performing manufacturing functions.

Question 5

In the portfolio matrix,a business unit that generates more cash than it needs to maintain its market share is called a:

A) star.
B) cash cow.
C) problem child.
D) dog.

Question 6

According to Ansoff's strategic opportunity matrix,which of the following factors is associated with market development?

A) Limit production.
B) Increase the prices of existing products.
C) Add new uses to current products.
D) Limit resources used for promotion.

Question 7

A strategic business unit (SBU)is a single business or a collection of related businesses.

Question 8

Which of the following statements is true of the innovation matrix?

A) As a company moves away from its core capabilities,it moves through a range of innovation.
B) If an SBU of a firm is in a market with low overall attractiveness,it must be harvested.
C) Products are matched with markets to develop alternative marketing strategies.
D) Clear-cut sectors define modern businesses' growth better than the fluid growth model.

Question 9

In the context of the innovation matrix,decisions taken at the _____ level implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands.

A) divestment
B) diversification
C) adjacent innovation
D) core innovation

Question 10

Tropical Horizons has opened spas in Thailand,Indonesia,and Malaysia and is aggressively expanding into countries around the Mediterranean.This illustrates which of the following strategies of Ansoff's strategic opportunity matrix?

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

Question 11

An operating decision is unlikely to have a great impact on the long-run profitability of a company.

Question 12

According to Ansoff's strategic opportunity matrix,a firm using the market penetration alternative would try to:

A) increase market share among existing customers.
B) attract new customers to existing products.
C) create new products for present markets.
D) introduce new products into new markets.

Question 13

In the context of the innovation matrix,which of the following decisions is designed to take company strengths into new markets?

A) Transformational innovations
B) Retroactive innovations
C) Adjacent innovations
D) Core innovations

Question 14

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

Question 15

Using the innovation matrix,the strategic decision to implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands is considered:

A) a core innovation.
B) an adjacent innovation.
C) a transformational innovation.
D) a diversification strategy.

Question 16

Which of the following is correct about the product development strategy of Ansoff's strategic opportunity matrix?

A) It is a marketing strategy that tries to increase market share among existing customers.
B) It is a marketing strategy that entails attracting new customers to existing products.
C) It is a marketing strategy that entails the creation of new products for present markets.
D) It is a strategy of increasing sales by introducing new products into new markets.

Question 17

According to Ansoff's strategic opportunity matrix,unlike market development,product development:

A) focuses on attracting present customers to existing products.
B) involves creating new products for present markets.
C) involves entering new markets as competitors.
D) focuses on using existing assets to provide added convenience to existing customers.

Question 18

When properly created,a strategic business unit (SBU)of a large company:

A) has a specific target market.
B) plans collaboratively with other SBUs of the company.
C) has no competitors.
D) shares the mission of its parent company.

Question 19

Remvault Dairies witnessed a steady decline in the sales of its products due to increased competition in the local market.Remvault Dairies plans to adopt the market development strategy.In this scenario,which of the following is the best step the company can take to rejuvenate its financial losses?

A) Introduce new products into new markets.
B) Create new products for its present markets.
C) Attract existing customers rather than new customers.
D) Focus on promoting new uses for old products.

Question 20

Critics of Ansoff's matrix mention that the matrix does not:

A) provide firms with different marketing strategies.
B) reflect the reality of how businesses grow.
C) indicate which types of markets can be created or entered given a company's core capabilities.
D) outline clear-cut sectors for businesses.

Question 21

If an organization has an SBU that it believes has the potential to be a star (and is probably a problem child at present),building would be an appropriate goal.

Question 22

According to the General Electric model for strategic alternatives,market conditions that have low overall attractiveness are the best candidates for investment.

Question 23

For a star,the best marketing tactic is to protect existing market share by reinvesting earnings in product improvement,better distribution,more promotion,and production efficiency.

Question 24

In the context of the portfolio matrix,which statement is generally true of SBUs considered to be dogs?

A) Protection of existing market share is essential for dogs.
B) Dogs have a dominant market share in low-growth markets.
C) Typical marketing strategies for dogs are to harvest or divest.
D) Dogs escalate in the market if given strong financial funding.

Question 25

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

A) dog.
B) cash cow.
C) star.
D) problem child.

Question 26

A diversification strategy is free of risk when a firm is entering unfamiliar markets.

Question 27

Which of the following defines the key goal of an SBU that is a very successful cash cow?

A) Hold
B) Build
C) Harvest
D) Divest

Question 28

Market penetration refers to attracting new customers to existing products.Ideally,new uses for old products stimulate additional sales among existing customers while also bringing in new buyers.

Question 29

According to Ansoff's strategic opportunity matrix,both product development and diversification entail the creation of new products.

Question 30

Adjacent innovation involves decisions that result in brand-new markets,products,and often new businesses by acquiring new assets to develop the type of breakthrough decisions that fall in this category.

Question 31

The basic goal of ________ is to increase the short-term cash return without too much concern for the long-run impact.

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

Question 32

Which of the following statements is true about a marketing plan?

A) It is a set of orally communicated rules and is seldom written down.
B) It is developed independently of the external business environment.
C) It defines the business mission and objectives.
D) It lacks the elements of advanced strategic planning.

Question 33

In the case of SBUs that are cash cows,problem children,or dogs,the basic goal of _______________ is to increase short-term cash return without increased concern for long-run impact.

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

Question 34

The strategy in which an SBU preserves market share so that it can take advantage of a very positive cash flow is called ______________.

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

Question 35

__________ is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

A) Divesting
B) Planning
C) Holding
D) Harvesting

Question 36

RegiSure is a strategic business unit that shows low growth but has a dominant market share.Because of its market share,it should receive additional financing despite its low growth.

Question 37

If an organization has an SBU that it believes has the potential to be a star,the best allocation of future resources would be to _________ that SBU.

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

Question 38

With reference to the General Electric model for selecting strategic alternatives,which of the following refers to how well placed in a market an organization needs to be to take advantage of opportunities?

A) Business position
B) Experience curve
C) Market attractiveness
D) Marketing myopia

Question 39

When an SBU has become a _____________,it is essential to either invest in it heavily to gain better market share,acquire competitors to get the necessary market share,reposition its products,or drop it.

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

Question 40

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,which of the following is true of SBUs considered to be question marks?

A) They operate in a high-growth industry with a low market share.
B) They generate more cash than they need to maintain their market share.
C) They have low growth potential and a small market share.
D) They do not require any cash to maintain their market.

Question 41

Which of the following firms is most likely to realize a competitive advantage through product/service differentiation?

A) A firm that sells its products at lower costs than its competitors
B) A firm that inhibits post-sale customer service relations
C) A firm that provides highly reliable products
D) A firm that solely relies on promotional strategies to increase its sales

Question 42

In the context of SWOT analysis,which of the following can be considered a strength of an organization?

A) Imitable products and services
B) A new unserved market
C) A superior production technology
D) Increased taxes on products

Question 43

The creation and implementation of a marketing plan allows the organization to achieve marketing objectives and succeed.

Question 44

Which of the following terms states that costs decline at a predictable rate as experience with a product increases?

A) Ansoff's strategic opportunity matrix
B) Experience curve
C) Marketing myopia
D) Market opportunity analysis (MOA)

Question 45

Which of the following generally does NOT result in a cost competitive advantage?

A) Efficient labor
B) Government subsidies
C) Product design
D) Maintaining older service delivery methods

Question 46

Which of the following strategies can enable companies to gain a cost competitive advantage?

A) Removing frills from products
B) Focusing on serving marginal customers
C) Eliminating reverse engineering efforts
D) Developing additional,exclusive functional departments

Question 47

Environmental scanning refers to the process of collecting and interpreting information about forces,events,and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.

Question 48

A business' mission does not affect its long-run resource allocation,profitability,or survival.

Question 49

According to the Boston Consulting Group model,the best strategy options in dealing with problem children are to invest heavily to gain better market share,acquire competitors to get the necessary market share,or drop the SBU.

Question 50

In the context of SWOT analysis,marketers can identify strengths and weaknesses by focusing on:

A) employee capabilities.
B) aspects of the marketing environment.
C) demographic forces.
D) macroenvironmental factors.

Question 51

Unlike a sustainable competitive advantage,a cost competitive advantage:

A) does not ensure satisfactory profit margins.
B) requires business firms to reduce after-purchase service options.
C) involves producing goods that cannot be copied by competitors.
D) is subject to continual erosion.

Question 52

Addoso Inc.manufactures electronic gadgets.The marketing managers at Addoso have found that a new competitor is gaining more customers.In the context of SWOT analysis,which of the following actions should be prioritized by Addoso's marketing managers?

A) They must analyze aspects of its marketing environment.
B) They must focus on organizational resources.
C) They should ignore macroenvironmental forces.
D) They should focus on lowering product prices.

Question 53

Which of the following is an example of a competitive advantage due to a product/service differentiation?

A) Receipt of government subsidies
B) Control of overhead costs
C) Establishment of a brand name
D) Procurement of inexpensive raw materials

Question 54

Which of the following practices can help businesses gain a cost competitive advantage?

A) Using simplified production techniques
B) Using expensive raw materials
C) Customizing products with extra features
D) Focusing on serving marginal customers

Question 55

Delat Corp.is a large corporation that offers several product lines.On the company's website,the following text is highlighted: "The aim of our business is to achieve profitability by offering our customers high-quality products that are manufactured in a cost-effective manner.Our goal is to provide value to our customers,serve the community,and preserve the environment." This text is most likely to be Delat Corp.'s __________________.

A) article of incorporation
B) statement of qualification
C) scenario planning
D) mission statement

Question 56

The collection and interpretation of data about forces,events,and relationships in the external environment that may affect the organization's future or its marketing plan implementation is called:

A) SWOT analysis.
B) environmental scanning.
C) competitive advantage.
D) cost competitive advantage.

Question 57

When examining an organization's internal strengths and weaknesses during SWOT analysis,the marketing manager may not focus on organizational resources such as production costs,marketing skills,financial resources,company or brand image,employee capabilities,or available technology.

Question 58

Rues and West Bros.,an ammunition manufacturer,defines its mission statement as being in the ammunition-production business rather than in the arms industry.In the given scenario,Rues and West Bros.is exhibiting _____.

A) marketing inertia
B) marketing myopia
C) marketing dissonance
D) marketing blockage

Question 59

Nile Inc.is one of the leading shoe manufacturing companies in Baltonia.It manufactures canvas shoes that are similar to those produced by other brands.The management of the company has decided to adopt a product/service differentiation competitive strategy.In this scenario,what would Nile be likely to do?

A) Offer its products at the lowest rates in the market
B) Produce aerobic,tennis,and baseball shoes that have specialized features
C) Advertise their products through more media outlets than before
D) Sell products to markets outside Baltonia

Question 60

Which of the following does a business exhibit when it describes itself in terms of goods and services rather than in terms of the benefits customers seek?

A) Marketing myopia
B) Marketing inertia
C) Marketing dissonance
D) Marketing blockage

Question 61

Freulia Inc.manufactures and sells stationery and office supplies.It is beginning to lose its competitive advantage with the entry of new competitors.In this case,to gain a sustainable competitive advantage,what should Freulia do?

A) Imitate the products of its competitors
B) Depend on government subsidies
C) Develop the skills and assets of the organization
D) Aim at being the low-cost competitor in the industry

Question 62

Which of the following encompasses 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?

A) Marketing strategy
B) Marketing objective
C) Marketing mix
D) Market opportunity analysis

Question 63

A statement of what is to be accomplished through marketing activities is called __________.

A) the marketing mix
B) a marketing objective
C) market opportunity analysis
D) a competitive advantage

Question 64

A company's skills include patents,copyrights,and technology that are superior to those of the competition.

Question 65

SharpSheets is a paper manufacturing company that sells products made of recycled materials.Because no other paper manufacturing company in the market has the ability to replicate its products,it can be said that SharpSheets has a competitive advantage.

Question 66

Nessca Inc.is a pharmaceutical company that designs its products to suit the needs of a group of people with similar characteristics.In this case,Nessca should target which of the following market segments?

A) A group of individuals who are diabetic
B) A group of individuals who work in the same organization
C) A group of individuals who are working professionals
D) A group of individuals who reside in the same residential area

Question 67

Product/service differentiation competitive advantage means that an organization provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition.

Question 68

A firm's assets are functions-customer service and promotions-that the firm performs better than its competitors.

Question 69

A competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition.

Question 70

Which of the following statements is true of a niche strategy?

A) Only large companies can implement a niche strategy.
B) Companies that adopt a niche strategy target a single market segment.
C) Only companies that do not have competitors can adopt a niche strategy.
D) Companies that adopt a niche strategy can only gain a price advantage over competitors.

Question 71

Imitation by competitors indicates a lack of competitive advantage and almost ensures mediocre performance.

Question 72

Which of the following actions is primarily associated with a niche strategy?

A) Choosing a target market that is not crucial to the success of major competitors
B) Manufacturing products in bulk and targeting average customers
C) Selling products without extra frills or options
D) Creating cross-departmental teams across all strategic business units

Question 73

Which of the following is correct about a sustainable competitive advantage?

A) It is not attractive because of its durability.
B) It cannot be copied by the competition.
C) It lowers costs by removing frills.
D) It does not offer any low-priced products.

Question 74

Drafi Arts Corp.makes and sells original handicraft products.The management of the company has been successfully using a niche strategy for years.In this case,which of the following is the most likely to be true of Drafi Arts Corp.?

A) It serves only a limited geographic market.
B) It offers products at a lower price than that of the competition.
C) It develops products that are similar to those of its competitors.
D) It lowers costs by removing frills and options from its products.

Question 75

Providing something to a target market that is unique and valuable beyond simply offering a lower price than that of the competition is called ________.

A) product/service differentiation
B) a niche competitive advantage
C) a sustainable competitive advantage
D) reengineering

Question 76

Imitating a rival's competitive advantage requires a company to first identify the rival's competitive advantage.

Question 77

Market segments cannot be differentiated by ethnicity and multicultural aspects.

Question 78

Which of the following strategies seeks to target and effectively serve a single segment of the market?

A) Niche competitive advantage
B) Sustainable competitive advantage
C) Product/service differentiation
D) Cost competitive advantage

Question 79

Which of the following firms is most likely to follow a niche strategy?

A) Libra Inc.,a motor company,adopts new production techniques to achieve economies of scale.
B) Alpha Electronics dissolves one of its strategic business units.
C) Venus Inc.sells health and beauty products similar to the ones available in the market.
D) Relish,a confectionery store,sells handcrafted chocolates in only one city.

Question 80

Which of the following is characteristic of companies that embrace a niche market strategy?

A) The strategy is often adopted by small companies with limited resources.
B) The strategy is employed in a market segment that has low growth potential.
C) The strategy is used to position the company as the long-term,low-cost competitor in an industry.
D) The company typically removes frills and options from the product or service slated for its niche market.