Deck 11: Competitive Dynamics

Question 1

Many factors shape a competitor's objectives, including size, history, current management, and

A) existing customer base.
B) expansion forecast.
C) pricing structure.
D) marketing plan.
E) financial situation.

Answer 1

E

Question 2

When the total market expands, the ________ usually gains the most.

A) market entrant
B) market nicher
C) market follower
D) market leader
E) market challenger

Answer 2

D

Question 3

Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following could pose a threat by raising prices or reducing quantity?

A) suppliers
B) substitutes
C) Buyers
D) industry competitors
E) potential entrants

Answer 3

A

Question 4

A segment is unattractive when there are actual or potential ________ for the product.

A) competitors
B) unclear demand
C) substitutes
D) profit fluctuation
E) contenders

Question 5

Coca-Cola focused on its soft-drink business, missed seeing the market for coffee bars and fresh fruit-juice bars. This is an example of

A) growing bargaining power
B) missed opportunities
C) category leadership
D) marketing myopia
E) emerging giants

Question 6

________ is the art of learning from companies that perform certain tasks better than other companies.

A) Competition
B) Market share
C) Industry definition
D) Benchmarking
E) Value delivery

Question 7

The ________ has the largest market share and usually shows the way to other firms in price changes, new-product introductions, distribution coverage, and promotional intensity.

A) market nicher
B) market challenger
C) market entrant
D) market leader
E) market follower

Question 8

Once a company identifies its primary competitors, it must ascertain their objectives, strengths and weaknesses, and

A) positioning.
B) vertical integration.
C) customers.
D) strategies.
E) locations.

Question 9

A(n) ________ is a group of firms that offer a product or class of products that are close substitutes for one another.

A) monopoly
B) cooperative
C) industry
D) demand field
E) cartel

Question 10

A segment is unattractive if the company's suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers' growing bargaining power?

A) Sears unsuccessfully attempted to compete with Walmart and Kmart.
B) Oil companies must purchase a significant amount of their product from OPEC.
C) Walmart has almost no competitors in its market space.
D) The U.S. Post Office has merged package operations with FedEx.
E) McDonald's is the largest fast food franchise and is still growing.

Question 11

Using the market approach, ________ are companies that satisfy the same customer need.

A) entrepreneurs
B) partners
C) innovators
D) followers
E) competitors

Question 12

Walmart is perhaps one of the best illustrations of the threat of ________ found in Porter's model.

A) intense segment rivalry
B) suppliers' growing bargaining power
C) buyers' growing bargaining power
D) substitute products
E) new entrants

Question 13

Using the ________ approach, we define competitors as companies that satisfy the same customer need.

A) challenger
B) competitive
C) industry
D) myopic
E) market

Question 14

When a firm looks for new users in groups that might use the product but do not, the firm is using the ________ strategy.

A) geographical-expansion
B) new-market segment
C) market-penetration
D) product development
E) diversification

Question 15

When firms look for new users in groups that have never used the product before, the firm is using the ________ strategy.

A) diversification
B) product development
C) geographical-expansion
D) market-penetration
E) new-market segment

Question 16

A market segment's attractiveness varies with the height of its entry and exit barriers. Which of the following forces as described by Michael Porter would most likely be examined by a marketing manager in the case of the rise of retail giants such as Walmart?

A) threat of intense segment rivalry
B) threat of suppliers' growing bargaining power
C) threat of substitute products
D) threat of new entrants
E) threat of buyers' growing bargaining power

Question 17

Which of the following would be the most likely threat that is associated with potential new entrants in Porter's segment structural attractiveness model?

A) threat of response
B) threat of role reversal
C) threat of delayed action
D) threat of mobility
E) threat of positioning

Question 18

How can Blue-Ocean thinking result in cost savings for companies that practise it?

A) by diminishing quality to increase profit margins
B) by searching within the conventional boundaries of industry competition
C) by seeking head-to-head battles with competitors based largely on price
D) by eliminating and reducing the factors affecting traditional industry competition
E) by competing in occupied market positions with traditional value expectations

Question 19

A broader set of actual and potential competitors is revealed by embracing the ________ concept of competition.

A) vertical
B) barrier
C) global
D) industry
E) market

Question 20

The most successful blue-ocean thinkers take advantage of all three platforms on which value innovation can take place. Which platform involves channels and logistics?

A) delivery
B) service
C) training
D) maintenance
E) physical product

Question 21

Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand?

A) increasing the amount of consumption
B) increasing the level of consumption
C) increasing frequency of consumption
D) increase the impulsiveness of consumption
E) increasing product innovation

Question 22

One of the market leader strategies for expanding the total market is to focus on more usage. Two avenues are open for doing this: increasing the frequency of consumption or

A) decreasing the number of product returns.
B) increasing the level or quantity of consumption.
C) decreasing sales-related expenses.
D) increasing adherence to everyday low pricing.
E) increasing the level of promotional expenditures relative to market share percentage.

Question 23

When your competitor delivers more for less, two strategies can be employed to meet this threat. Such a situation was recently faced by Kmart. Which of the following combinations would be most appropriate to meet the challenge thrown-down by the competitor?

A) computerization or implementation
B) adaptation or innovation
C) expansion or standardization
D) differentiation or execution
E) market penetration or product innovation

Question 24

In a pure ________ attack, the attacker matches its opponent's product, advertising, price, and distribution.

A) guerilla
B) bypass
C) encirclement
D) flank
E) frontal

Question 25

In general, a market leader will have about ________ of the total market in relation to other competitors.

A) 40 percent
B) 75 percent
C) 60 percent
D) 50 percent
E) 30 percent

Question 26

Being a market leader is often a difficult position to maintain and defend. The market leader must protect its current market share through good defensive and offensive actions. Second, the firm can try to increase its market share, even if the market size remains constant. What is the third course of action recommended for market leaders?

A) The firm must pursue markets others do not want.
B) The firm must find new, innovative technologies on a monthly basis.
C) The firm must find ways to expand total market demand.
D) The firm must strive to win promotional awards.
E) The firm must be a cost leader.

Question 27

A marketing manager has decided to "leapfrog" competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as ________.

A) flank attack
B) encirclement attack
C) guerrilla warfare
D) bypass attack
E) frontal attack

Question 28

When a regional computer-manufacturing firm began to seek out customers who lived outside of its traditional market boundaries, the firm was employing which of the following new customer expansion strategies to expand its total market?

A) product differentiation strategy
B) latent demand strategy
C) market-penetration strategy
D) geographic-expansion strategy
E) new-market segment strategy

Question 29

Which of the following strategies should be adopted by marketers during a recession?

A) increase investment on marketing existing products
B) focus on expanding the customer base and not on the retention of existing customers
C) focus primarily on price reductions and discounts
D) concentrate on communicating the brand value
E) stick to the budget allocations adopted during the preceding years

Question 30

Apex Corporation is considered to be a market follower in its industry. About what percentage of a hypothetical market structure would be controlled by market followers such as Apex?

A) 30 percent
B) 10 percent
C) 25 percent
D) 20 percent
E) 40 percent

Question 31

The market nicher serves small market segments not being served by larger firms. Nichers account for about ________ of the market in relation to other competitors.

A) 10 percent
B) 20 percent
C) 15 percent
D) 30 percent
E) 25 percent

Question 32

When large companies can no longer defend all their territory, they launch a ________ defense where they give up weaker markets and reassign resources to stronger ones.

A) contraction
B) preemptive
C) flank
D) mobile
E) position

Question 33

As a marketing manager, you have decided to pursue new customers with your established products. Specifically, the new customers that you want are those who might use the product but do not at present. Which of the following strategies is recommended to pursue such a customer market?

A) new-market segment strategy
B) consolidation strategy
C) market-penetration strategy
D) geographical-expansion strategy
E) needs-assessment strategy

Question 34

Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced a sluggish sales growth in most of its product categories during three consecutive quarters of 2009. However, market analysis revealed that its competitors' sales had also slackened during this period. Analysts pointed out that when all firms are losing sales, it is extremely important to adopt strategies that are aimed at retaining customers. This led the firm to reduce operation costs while maintaining product quality. They also revamped their marketing strategy to focus on the values created by their products. Which of the following can be inferred from the strategies adopted by the firm?

A) The company was marketing its products amidst an economic downturn.
B) The company was trying to protect its market share and continue to operate as a market leader.
C) The company was focusing on geographical expansion.
D) The company was aiming to capture a new market segment.
E) The company was focusing on market penetration.

Question 35

A group of firms following the same strategy in a given target market is called a ________.

A) cabal
B) cartel
C) cooperative
D) informal alliance
E) strategic group

Question 36

When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the ________ of the brand.

A) amount of consumption
B) frequency of consumption
C) level of consumption
D) dedication to consumption
E) awareness consumption

Question 37

Once a company has identified its main competitors and their strategies, it must next ask:

A) What are competitors seeking?
B) What are the competitive brand attributes?
C) What are the subtle market entrance requirements?
D) What is the attrition rate in the market?
E) What are the competitive promotion schemes?

Question 38

When "petroleum" companies such as Canadian-owned Nexen have sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a ________ strategy.

A) preemptive defense
B) counteroffensive defense
C) flank defense
D) contraction defense
E) mobile defense

Question 39

In a ________ defense strategy, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it's forced to pull back to defend itself.

A) position
B) counteroffensive
C) preemptive
D) contraction
E) flank

Question 40

To counter value-based players, it will be necessary to focus on areas where their business models give other companies room to maneuver. For example, instead of directly competing with Walmart and other retailers, Shoppers Drug Mart emphasizes convenience, selection, and expert advice. Which of the following general strategies is Shoppers rug Mart using as its main competitive focus?

A) differentiation
B) execution
C) cost leadership
D) vertical integration
E) implementation

Question 41

Starbucks has a multi-pronged approach to growth. The fact that it operates in 44 different countries is reflective of its geographical-expansion strategy, and the fact that Starbucks sells whole-bean coffees in supermarkets is reflect of its

A) market-penetration strategy.
B) market-diversification strategy.
C) product innovation strategy.
D) new-market-segment strategy.
E) market-development strategy.

Question 42

Some market leaders have increased profitability by selectively ________ market share in weaker areas.

A) decreasing
B) trading
C) sharing
D) increasing
E) protecting

Question 43

Market broadening and market diversification are likely tactics employed in which of the following market leader defensive strategies?

A) flank defense
B) mobile defense
C) counteroffensive defense
D) position defense
E) preemptive defense

Question 44

Which of the following companies has been characterized as a "runner-up" or "trailing" firm in its industry?

A) Proctor & Gamble
B) Toyota
C) British Airways
D) Ford
E) Honda

Question 45

A marketing manager of a market challenger-type organization has decided to "leapfrog" competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as being what is called the

A) guerrilla warfare.
B) frontal attack.
C) bypass attack.
D) flank attack.
E) encirclement attack.

Question 46

The "best defense is a good offense" would be a policy under which of the following market leader defensive strategies?

A) preemptive defense
B) position defense
C) contraction defense
D) flank defense
E) lateral defense

Question 47

In satisfying customer needs, a ________ marketer discovers and produces solutions customers did not ask for but to which they enthusiastically respond.

A) combative
B) manipulative
C) responsive
D) anticipative
E) creative

Question 48

________ become market leaders through superior value delivery of unmet and maybe even unknown consumer needs.

A) Creative marketers
B) Anticipative marketers
C) Reactive marketers
D) Market-driving firms
E) Responsive marketers

Question 49

Market leaders are constantly under attack from large and small competitors alike. What is the most constructive response a market leader can make when defending its terrain?

A) continuous innovation
B) meet all challengers with a swift response
C) basic cost control
D) expanding expected benefits
E) expanding desired benefits

Question 50

Firms that occupy second, third, and lower ranks in an industry can adopt two postures in responding to competition. First, they can attack the leader and other competitors in an aggressive bid for further market share. Second, they can

A) not worry about the immediate future and focus on long-term results (market maturation).
B) play ball and not "rock the boat" (market followers).
C) give up and quit (market abandonment).
D) relinquish their own share to industry leaders (market capitulators).
E) form alliances with enemies (market organizational constriction).

Question 51

According to attack strategies available to the market challenger, the ________ can be used when the challenger spots areas where the opponent is under performing.

A) guerilla warfare
B) backwards-flank-attack
C) frontal attack
D) flank-geographic-attack
E) encirclement attack

Question 52

A market challenger strategist must carefully consider all attack options before moving forwards. If the strategist chooses the ________ approach, selective price cuts, intense promotional blitzes, and occasional legal action will probably be commonplace in the strategic design.

A) frontal attack
B) encirclement attack
C) flank attack
D) guerilla attack
E) bypass attack

Question 53

A market challenger must decide who to attack. Which of the following is a high-risk but potentially high-payoff strategy?

A) It can attack the market leader.
B) It can attack small local firms.
C) It can attack firms its own size that are underfinanced.
D) It can attack firms its own size that are not doing the job.
E) It can attack a global conglomerate that is market hungry.

Question 54

Harvey's is a market challenger in the highly competitive fast-food marketplace. Harvey's adopted a ________ in order to occupy a different space from the healthy food bandwagon.

A) frontal attack
B) mobile attack
C) encirclement attack
D) bypass attack
E) flank attack

Question 55

Because the cost of buying higher market share may far exceed its revenue value, a company should consider four factors before pursuing increased market share. Which of the following involves putting a strain on the firm's resources?

A) economic cost
B) the effect of increased market share on actual and perceived quality
C) producing award-winning promotional campaigns
D) pursuing the wrong marketing-mix strategy
E) the possibility of provoking antitrust action

Question 56

________ defense involves occupying the most desirable market space in the minds of the consumers, making the brand almost impregnable.

A) Position
B) Mobile
C) Flank
D) Contraction
E) Preemptive

Question 57

A marketing manager has planned a strategy that will require that the organization erect outposts to protect its weak front-running brands. Because these outposts will be central to the organization's new competitive strategy, we can say that a ________ defense is being used.

A) position
B) preemptive
C) flank
D) counteroffensive
E) mobile

Question 58

In which of the following viable attack strategies that can be employed by a market challenger does the attacker match its opponent's product, advertising, price, and distribution?

A) flank attack
B) guerilla warfare
C) counteroffensive attack
D) frontal attack
E) bypass attack

Question 59

Jessie Shambra is an up-and-coming marketing manager for a large department store chain. Ms. Shambra has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts (including advertising, new store openings, price cuts, new distributor alliances, and creative merchandising). Her "blitz" is comparable to any done by the military in time of war. Which of the following market challenger attack strategies is Ms. Shambra using to attack her competition?

A) frontal attack
B) flank attack
C) guerrilla warfare
D) encirclement attack
E) bypass attack

Question 60

Sony is an unusual market leader. It gives its customers new products that they have never even asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) ________ firm.

A) vision-driven
B) operations-driven
C) virtually-driven
D) market-driving
E) market-driven

Question 61

Which of the following market follower strategies involves selling on the black market or through disreputable dealers?

A) innovator
B) cloner
C) counterfeiter
D) adapter
E) imitator

Question 62

In terms of comparisons with a market leader, whereas the market leader achieves high volume, the market nicher achieves

A) high margin.
B) low margin.
C) medium pricing.
D) lower demand.
E) high promotability.

Question 63

During the ________ stage of a product's life cycle, sales show a downward drift and profits erode.

A) introduction
B) growth
C) decline
D) maturity
E) obsolescence

Question 64

As a market follower strategy, the ________ emulates the leader's products, name, and packaging, with slight variations.

A) imitator
B) counterfeiter
C) innovator
D) cloner
E) adapter

Question 65

An alternate way to increase sales volume is to increase the usage rate among users. This can be done by ________.

A) converting nonusers
B) having consumers use less of the product on each occasion
C) having consumers use the product on more occasions
D) attracting competitors' customers
E) entering new market segments

Question 66

Many companies prefer to follow rather than challenge the market leader. Patterns of ________ are common in capital-intensive, homogeneous-product industries, such as steel, fertilizers, and chemicals.

A) "feature fashion"
B) "conscious parallelism"
C) "supply delay"
D) "predatory pricing"
E) "covert security analysis"

Question 67

A job-shop specialist ________.

A) sells only in a certain locality, region, or area of the world
B) operates at the low- or high-quality ends of the market
C) offers one or more services not available from other firms
D) customizes its products for individual customers
E) specializes in serving only one channel of distribution

Question 68

As a market follower strategy, the ________ duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.

A) counterfeiter
B) innovator
C) cloner
D) imitator
E) adapter

Question 69

As a market follower strategy, the ________ copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location. This strategy is tolerated by the market leader as long as the follower's aggressiveness does not mount.

A) adapter
B) innovator
C) imitator
D) counterfeiter
E) cloner

Question 70

When a bank takes loan requests over the phone and hand-delivers the money to the customer, it becomes a ________ specialist.

A) geographic
B) job-shop
C) service
D) quality-price
E) channel

Question 71

President's Choice laundry detergent is packaged to look much like Tide, Procter & Gamble's famous brand. Which of the following market follower strategies is being employed by for the above market entries?

A) adapter
B) imitator
C) cloner
D) counterfeiter
E) reverse-innovator

Question 72

________ is a distribution strategy that can be effectively used during the growth stage of the product life cycle.

A) Building product awareness
B) Phasing out unprofitable outlets
C) Building selective distribution
D) Increase distribution coverage
E) Stressing on brand differences

Question 73

Sun Microsystems licensed its Java software to millions of software developers to make a stand against archrival Microsoft. Which type of challenger strategy does this represent?

A) flank attack
B) guerilla warfare
C) encirclement attack
D) frontal attack
E) bypass attack

Question 74

According to Peter Golder and Gerald Tellis, a(n) ________ is the first to develop a working model of the product.

A) developer
B) creative pioneer
C) product pioneer
D) market pioneer
E) inventor

Question 75

If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is employing a ________ strategy.

A) counteroffensive defense
B) mobile defense
C) flank defense
D) preemptive defense
E) contraction defense

Question 76

Nichers have three tasks: creating niches, ________, and protecting niches.

A) cloning niches
B) attacking niches
C) expanding niches
D) specialization
E) guerilla warfare

Question 77

A niche firm that specializes in customizing its products for individual customers is known as a ________.

A) vertical-level specialist
B) specific-customer specialist
C) channel specialist
D) job-shop specialist
E) customer-size specialist

Question 78

Which of the following best describes Theodore Levitt's suggestion?

A) Imitation is wrong and should be punished.
B) Innovation is not possible without substantial imitation.
C) Product imitation might be as profitable as a strategy of product innovation.
D) Innovation cannot begin unless dissatisfaction with imitation occurs.
E) Imitation should be against the law because of the intellectual property decision involved.

Question 79

An alternate way to increase sales volume is to expand the number of users. This can be done by ________.

A) having consumers use the product on more occasions
B) attracting competitors' customers
C) having consumers use more of the product on each occasion
D) having consumers use the product in new ways
E) remaining in the current market segment

Question 80

An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a(n)

A) guerilla marketer.
B) strategic clone.
C) market nicher.
D) marketing knave.
E) segment king.