Deck 2: Strategic Planning for Competitive Advantage

Question 1

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

Answer 1

 True

Question 2

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.

Answer 2

 True

Question 3

Unlike product development,market development involves opening businesses in markets that are already served by separate,well-established companies.

Answer 3

 False

Question 4

According to the Boston Consulting Group's (BCG's)portfolio matrix,a dog shows rapid growth but poor profit margins.

Question 5

Marketing managers rely on customer databases for effective implementation of the market penetration strategy.

Question 6

Eldams Inc.,a technological firm,started producing a new gaming console for its domestic market.This shows that Eldams Inc.has adopted a diversification strategy.

Question 7

Unlike an operating decision,a strategic decision probably will not have a big impact on the long-run profitability of the company.

Question 8

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

Question 9

Fresnas Inc.introduced a new line of smartphones in the market.Since it generates huge profits and needs more financing,the new line of smartphones can be categorized as dogs.

Question 10

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

Question 11

A company sells paper stationery made of recycled materials that no other paper manufacturing company in the market has the ability produce.This company has a competitive advantage.

Question 12

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

Question 13

According to the Boston Consulting Group's (BCG's)portfolio matrix,a star is a fast-growing market leader.

Question 14

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

Question 15

If an organization has a strategic business unit that has been classified as a star,harvesting would be an appropriate goal.

Question 16

The key to having a competitive advantage is the ability to imitate a competitor's strategy.

Question 17

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 18

A diversification strategy is ideal when a firm is entering unfamiliar markets.

Question 19

Marketing myopia means long-term thinking.

Question 20

RegiSure is a strategic business unit that shows low growth but has a dominant market share.Since it has a dominant market share,it should be additionally financed despite its low growth.

Question 21

According to Ansoff's strategic opportunity matrix,a firm that adopts a diversification strategy:

A)​will profit if it enters a new market with little competition.
B)will be free from risks in unfamiliar markets.
C)will decrease the prices of existing products.
D)​will sell modified products to existing customers in existing markets.

Question 22

Individuals in the age group of 11 to 16 years who extensively use the internet is an example of a market segment.

Question 23

In a target market strategy,identifying the market segment or segments begins with a market opportunity analysis (MOA).

Question 24

A task force is a tightly organized unit under the direction of a manager who,usually,has broad authority.

Question 25

Which of the following statements is true of strategic planning?

A) will have its own return on investment​
B) will share the same goals and use the same strategies as Fourlotts Inc
C) will plan collaboratively with Fourlotts Inc.'s other SBUs​
D)​ will refrain from performing manufacturing functions

Question 26

Market segments cannot be differentiated by demographic characteristics.

Question 27

Marketing objectives serve as motivators by creating something for employees to strive for.

Question 28

Which of the following statements is true of strategic planning?

A)​The goal of strategic planning is to create daily operational schedules for first-line workers.
B)Strategic decisions require short-term commitments of resources.
C)A good strategic plan can help protect and grow a firm's resources.
D)Stra tegic planning lacks an understanding of customers and the market.

Question 29

Marketing objectives must be consistent with and indicate the priorities of the organization.

Question 30

Choqlate King Inc.is a large company that produces and sells chocolate bars.It plans to adopt a product development strategy.In this case,which of the following is most likely to happen?

A)​It will focus on attracting new and retaining existing customers.
B)It will create competition by lowering the prices of its chocolates.
C)It will introduce a low-fat chocolate that has zero cholesterol. 
D)​It will use existing assets to provide added convenience to existing customers.

Question 31

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 32

Market segments cannot be differentiated by ethnicity and multicultural aspects.

Question 33

Strategic planning is just an annual exercise.

Question 34

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

A)​ Limiting the production of products
B)Increasing the prices of products
C) Adding new uses to products
D)​ Limiting resources used for promotion

Question 35

The term marketing mix refers to a unique blend of product,place (distribution),promotion,and pricing strategies (often referred to as the four Ps)designed to produce mutually satisfying exchanges with a target market.

Question 36

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 is most likely to happen?

A) Magnira Inc. will enter markets that are already served by separate companies.​
B) Magnira Inc. will target existing customers rather than new customers.​
C) Magnira Inc. will create new products for the markets it has penetrated.
D) Magnira Inc. will move away from its core capabilities, and it will traverse a range of change.​

Question 37

 Laelle Corp.is a company that produces large automotive spare parts.It has three offices in the country.According to Ansoff's strategic opportunity matrix,if Laelle Corp.follows a market development strategy,

A) it creates new products for its present markets​
B) it focuses on promoting new uses for old products​
C) it focuses on attracting existing customers rather than new customers​
D)​it ventures into a new business and shut down its existing business

Question 38

Apcon Mobiles Inc.is a popular cell phone manufacturing company.To acquire new customers,it decides to launch its own sim cards in new markets.According to Ansoff's strategic opportunity matrix,which of the following is true of Apcon Mobiles Inc.?

A)​Apcon Mobiles Inc.'s entry into unfamiliar markets is likely to be risky.
B)Apcon Mobiles Inc. follows a product development strategy.
C)Apcon Mobiles Inc.'s strategy can be implemented by using customer databases.
D)​Apcon Mobiles Inc.'s entry into a market with high competition is likely to be successful.

Question 39

When properly created,a strategic business unit (SBU)

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 40

 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)uses existing assets to provide added convenience to existing customers.

Question 41

Which of the following statements is true of 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 42

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 43

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,unlike question marks,dogs:

A)​are suitable for a holding strategy.
B)have a small market share.
C)operate in a high-growth market.
D)​show rapid growth but poor profit margins.

Question 44

_____ tells us that costs decline at a predictable rate as experience with a product increases.

A)​A market opportunity analysis (MOA)
B)An experience curve
C)Marketing myopia
D)​Ansoff's strategic opportunity matrix

Question 45

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,which of the following is a similarity between stars and cash cows?

A)​Both have rapid growth potential but poor profit margins. 
B)Both have a low growth potential.
C)Both have a high market share in their respective markets.
D)​Both have a low market share in their respective markets.

Question 46

Addoso Inc.manufactures electronic gadgets.The marketing managers at Addoso Inc.have discovered that a new competitor is gaining more customers by selling products at lower prices.In the context of SWOT-internal strengths (S)and weaknesses (W)and external opportunities (O)and threats (T)-analysis,which of the following actions should be taken by the marketing managers at Addoso Inc.?

A)​They must analyze aspects of the marketing environment.
B)They must focus on organizational resources.
C)They should ignore macroenvironmental forces.
D)​They should focus on production costs and marketing skills.

Question 47

Which of the following statements is true of an effective business mission statement?

A)​It is based on an analysis of anticipated environmental conditions.
B)It is kept confidential from customers and stakeholders.
C)It should define a business in terms of goods and services rather than in terms of the benefits customers seek.
D)​It is stated after the details of a marketing plan are developed.

Question 48

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,which of the following is a similarity between cash cows and dogs?

A)​Both operate in high-growth markets.
B)Both operate in low-growth markets.
C)Both have a high market share in their respective markets.
D)​Both have a low market share in their respective markets.

Question 49

Issues such as product lines,promotional communications,and pricing are all delineated in the _____.

A)​statement of qualification
B)article of incorporation
C)marketing plan
D)​financial statement

Question 50

When a company defines its mission statement based on its short-term objectives,it is said to be suffering from _____.

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

Question 51

_____ is the strategy of preserving market share so that an organization can take advantage of the very positive cash flow.

A)​Building
B)Holding
C)Harvesting
D)​Divesting

Question 52

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 53

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,which of the following is a similarity between stars and question marks?

A)​Both operate in a high-growth industry.
B)Both operate in a low-growth industry.
C)Both have a high market share in their respective markets.
D)​Both have a low market share in their respective markets.

Question 54

Delat Corp.is a large corporation that offers several product lines.On the company's Web site,the following content 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 goals are to provide value to our customers,serve the community,and preserve the environment." This content is most likely to be Delat Corp.'s _____.

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

Question 55

In the context of SWOT-internal strengths (S),weaknesses (W),external opportunities (O),and threats (T)-analysis,marketers can identify strengths and weaknesses by focusing on:

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

Question 56

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

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

Question 57

In the portfolio matrix,a _____ has low growth potential and a small market share.

A)​question mark
B)problem child
C)star
D)​dog

Question 58

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,a _____ is a strategic business unit that generates more cash than it needs to maintain its market share.

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

Question 59

In the context of SWOT-internal strengths (S),weaknesses (W),external opportunities (O),and threats (T)-analysis,which of the following can be considered as 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 60

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

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

Question 61

A company can gain a cost competitive advantage by:

A)reorganizing functional departments into cross-disciplinary teams.​
B)manufacturing highly customized products.
C)providing extra options on products or services.
D)​manufacturing products using complex production techniques.

Question 62

Unlike a cost competitive advantage,a competitive advantage based on product/service differentiation:

A)​tends to be more attractive to top managers because of its durability.
B)provides a shorter-lasting competitive advantage.
C)focuses primarily on offering a low-priced product or service than that of competitors.
D)​lowers costs by removing frills and options from a product or service.

Question 63

Nessca Inc.is pharmaceutical company.It follows a target market strategy as its products are designed to suit the needs of a group of people with similar characteristics.In this case,which of the following market segments can be targeted by Nessca Inc.?

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 64

Nile Inc.is one of the leading shoe manufacturing companies in Baltonia.It manufactures canvas shoes that are quite 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,Nile Inc.should:

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 it previously did.
D)​sell products to markets outside Baltonia.

Question 65

Which of the following companies adopts a product/service differentiation competitive advantage?

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 66

A product/service differentiation competitive advantage can be achieved by:

A)​using inexpensive raw materials.
B)having a strong dealer network.
C)having low overhead costs.
D)​creating generic products.

Question 67

Freulia Inc.manufactures and sells stationery and office supplies.The firm loses its competitive advantage with the entry of new competitors.In this case,in order to gain a sustainable competitive advantage,Freulia Inc.should:

A)​imitate the products of its competitors.
B)depend on government subsidies.
C)build its own competitive advantages.
D)​aim at being the low-cost competitor in the industry.

Question 68

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 69

An effective marketing objective:

A)​is qualitative rather than quantitative.
B)is compared to a benchmark.
C)is written independently of the mission statement.
D)​is written after a marketing plan is drafted.

Question 70

Jove Inc.is a chocolate manufacturer in the city of Lumberne.While most of the companies in the market produce not more than three basic varieties of chocolates,Jove Inc.sells over 50 different varieties of flavored chocolates.This gives it an edge over the other chocolate makers in Lumberne.This is an example of _____.

A)​a divestment
B)market penetration
C)a sustainable competitive advantage
D)​diversification

Question 71

The marketing mix typically involves:

A)​distribution strategies.
B)divestiture strategies.
C)restrictive covenants.
D)​federal regulations.

Question 72

Unlike a product/service differentiation competitive strategy,a niche strategy:

A)​is suitable for small companies with limited resources.
B)is opted in a market segment that has low growth potential.
C)aims at being the low-cost competitor in an industry.
D)​removes frills and options from a product or service.

Question 73

Which of the following actions is associated with the 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 the strategic business units

Question 74

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

A)​Only large companies can implement a niche strategy.
B)Companies that adopt a niche strategy have only a small number of customers.
C)Only the 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 75

Drafi Arts Corp.makes and sells original handicraft goods.The management of the company has been successfully using a niche strategy for many years.In this case,which of the following is 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 76

In the context of the marketing mix,which of the following statements is true of the product?

A)​It includes not only the physical unit but also its package, warranty, and after-sale service.
B)It is what a buyer must give up in order to obtain a benefit.
C)It includes all the business activities concerned with storing and transporting raw materials.
D)​It is the last element of the marketing mix.

Question 77

Which of the following is an element of the marketing mix?

A)​Pricing strategies
B)Divestment strategies
C)Investment strategies
D)​Trade restraint strategies

Question 78

Which of the following is a distinct feature of a product/service differentiation competitive advantage?

A)​Using government subsidies
B)Controlling overhead costs
C)Establishing a brand name
D)​Obtaining inexpensive raw materials

Question 79

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 frills
D)​Focusing on serving marginal customers

Question 80

Which of the following examples illustrates a niche strategy?

A)​Libra Inc., a motor company, using new production techniques to achieve economies of scale
B)Alpha Electronics deciding to dissolve one of its strategic business units
C)Venus Inc. selling products similar to the ones available in the market
D)​Relish, a confectionery store, selling handcrafted chocolates in only one city