Deck 9: Business Strategies: a Foundation for Marketing Program Decisions

Question 1

Defender businesses are businesses which pay more attention to the development of new products.

Answer 1

False

Question 2

Analyzer businesses are often in industries that are still growing or experiencing technological changes.

Answer 2

True

Question 3

Business strategies are primarily concerned with identifying viable business opportunities in the market.

Answer 3

False

Question 4

All not-for-profit service organizations are concerned with producing and marketing a service as an adjunct to a physical product rather than marketing a service as their primary offering.

Question 5

When examined on a country-by-country basis,the same business unit might be viewed as pursuing different competitive strategies in different countries.

Question 6

Services can be experienced in advance of the sale,while goods cannot be experienced,or tested,before purchase.

Question 7

Most start-ups succeed by competing as a "me-too" competitor in a well-established and highly competitive product-market.

Question 8

Analyzer businesses usually operate in broad and rapidly changing domains where neither the technology nor customer segments are well established.

Question 9

In an SBU the competitive strategies should be tailored to their unique resources and competencies and aimed at securing a sustainable advantage over existing or potential competitors.

Question 10

Michael Porter distinguishes three strategies that businesses pursue to gain and maintain competitive advantages in their various product-markets: (1)overall cost leadership;(2)differentiation;and (3)focus.

Question 11

Reactors are businesses that concentrate only on maintaining their positions in established product-markets.

Question 12

Most businesses compete in a reasonably consistent way across all of their product-markets,whether their domain is broad or narrow.

Question 13

Most SBUs simultaneously pursue different competitive strategies across all product-markets in which they compete.

Question 14

One possible outcome of changes due to the evolution of the Internet is that it will be hard for firms to differentiate themselves on the basis of low price.

Question 15

Evidence suggests that a substantial portion of businesses fall into the defender category.

Question 16

A business unit's core competencies and resources,together with the customer and competitive characteristics of its industry,determine the viability of any particular competitive strategy.

Question 17

In smaller single-business firms the distinction between business-level competitive strategy and marketing strategy tends to blur and the two strategies blend into one.

Question 18

Defender businesses tend to operate in relatively well-defined,narrow,and stable domains where both the product technology and the customer segments are mature.

Question 19

The internet will make it easier for firms,both manufacturers and retailers,to customize their offerings and personalize their relationships with their customers.

Question 20

There is little need for a prospector business to consider how it will compete in the new product-markets it develops because it will face little or no competition-at least not until those markets become established.

Question 21

Efficiency is commonly measured by such items as sales growth relative to competitors or changes in market share.

Question 22

Prospector businesses are expected to outperform defenders on both new product development and market-share growth.

Question 23

In which type of generic business-level strategy does a company attempt to avoid direct,head-on competition with its major competitors and concentrate,instead,on narrowly defined market niches?

A)Analyzer strategy
B)Focus strategy
C)Cost-leader strategy
D)Differentiation strategy

Question 24

Some firms that are technological leaders in their industries defend individual product-market entries as they mature,in the face of increasing competition and eroding margins.

Question 25

The sharing of operating facilities and programs may be an inappropriate approach to gaining synergy for businesses following a prospector strategy.

Question 26

A defender strategy works best in industries where the basic technology is not very complex or where it is well developed and unlikely to change dramatically over the short term.

Question 27

Automobile manufacturing is an appropriate example of an industry that uses analyzer strategy.

Question 28

According to Porter,the three competitive positions that businesses pursue to gain and maintain competitive advantage in product-markets are:

A)maintaining a secure position in a relatively stable product,offering a limited range of products,and protecting its domain by offering lower prices.
B)prospector strategy,analyzer strategy,and defender strategy.
C)low investment on advertising,price competitiveness,and high investment on product quality.
D)overall cost leadership,differentiation,and focus.

Question 29

Defenders rely more heavily on independent channel members such as manufacturer's representatives or wholesale distributors to distribute their products.

Question 30

According to Porter,firms that do not follow a distinctive strategy:

A)will perform poorly in the competitive market.
B)will build customer perceptions of superior product quality.
C)will avoid direct confrontation with their major competitors.
D)will operate within a broad product-market domain.

Question 31

Temptation,a fast food joint,offers a limited selection of pizzas.In spite of its narrow range and lack of experimentation with new products,it has established a strong position in the market owing to its consistent product-market orientation and superior product quality and service.In the context of the Miles and Snow typology,which of the following business strategies has been employed by Temptation?

A)Prospector
B)Defender.
C)Analyzer
D)Endorser

Question 32

Miles and Snow classify business units into four strategic types.These are:

A)cost leader,differentiator,focus,and stuck-in-the-middle.
B)liquidator,harvester,share maintainer,and share grower.
C)leader,follower,guerrilla,and flanker.
D)prospector,analyzer,defender,and reactor.

Question 33

A prospector strategy is particularly well suited to stable and static environments.

Question 34

Differentiated defenders compete by offering more or better choices to customers than their competitors.

Question 35

A low-cost defender strategy is usually not so effective in fragmented markets desiring customized offerings as it is in commodity industries.

Question 36

The generic business-level strategy which attempts to build customer perceptions of superior quality product,design or service is called:

A)a cost leader strategy.
B)a focus strategy.
C)a differentiation strategy.
D)a quality strategy.

Question 37

Which of the following is the most essential strategic question to be asked by firms at the SBU level?

A)What industries should we be in?
B)What are the life-cycle stages of the SBU subunits?
C)How are we going to compete in this business?
D)How does this businesses portfolio compare to the optimal portfolio?

Question 38

According to the Miles and Snow typology,the prospector strategic type:

A)is likely to be the "first mover" in new-product market areas.
B)attempts to locate and maintain a secure niche in relatively stable product areas.
C)attempts to maintain a stable,limited line of products.
D)lacks a well-defined strategy.

Question 39

Effectiveness is the success of a business's products and programs relative to those of its competitors in the market.

Question 40

Prospector and to a lesser degree,analyzer businesses devote a relatively small proportion of resources to the development of new product-markets.

Question 41

Speed,an automobile company,has a broad product range that includes cars as well as car accessories.It prioritizes new product and service development and innovation to meet new and changing customer needs and demands and to create new demands.It is constantly on the lookout for new opportunities and ensures that it is the "first mover" in new product and market areas.In the context of the Miles and Snow typology,this accurately exemplifies the _____ strategy.

A)prospector
B)defender
C)endorser
D)reactor

Question 42

A _____ is defined as any activity or benefit that one party can offer to another that is essentially intangible and that does not result in the ownership of anything.

A)product
B)service
C)good
D)merchandise

Question 43

Profitability as a percent of sales and return on investment are said to be measures of:

A)effectiveness.
B)differentiation.
C)adaptability.
D)efficiency.

Question 44

If a company such as Volvo adds the all-wheel-drive technology to one of its car lines to exploit a growing market for luxury cars,while maintaining its position in the established markets,we can infer that the company follows the _____ strategic type.

A)high-cost prospector
B)differentiated analyzer
C)low-cost prospector
D)differentiated endorser

Question 45

According to the Miles and Snow typology,the analyzer strategic type:

A)tends to ignore industry changes not directly related to its area of operation.
B)is seldom a first mover,but often a second or third entrant in product-markets related to its existing market base-often with a lower-cost or higher-quality product offering.
C)responds primarily when forced to by environmental pressures.
D)values being a "first mover" in new product and market areas,even if not all of these efforts prove to be highly profitable and does not have a stable line of products.

Question 46

One of the most common measures of adaptability is:

A)the number of successful new products introduced relative to competitors.
B)profitability as a percent of sales.
C)the percentage of sales accounted for by products introduced within the last six months.
D)the change in market share during the current year.

Question 47

The difference between single-business and multi-SBU organizations is that in the case of smaller single-business firms:

A)the business-level competitive strategy and marketing strategy blend into one.
B)a greater weight is given to the business-level competitive strategy.
C)always start off with the defender strategy.
D)tend to avoid unique products or services.

Question 48

Which type of strategy is particularly well-suited to environments which are unstable and rapidly changing due to new technology and/or shifting customer needs?

A)Prospector
B)Differentiated defender
C)Low-cost defender
D)Reactor

Question 49

The category of business most likely to devote the largest proportion of resources to development of new product-markets is the _____ business.

A)defender
B)prospector
C)differentiator
D)reactor

Question 50

Tata Motors,an leading auto company in India,launched its low-priced car model,Nano,in the year 2009.It made the production of Nano possible by using lighter material and replacing expensive material with less expensive material wherever possible,without compromising on safety and environmental issues.Thus,with a successful implementation of its well-constructed strategy,it has strengthened and defended its share of the established market.The company has very successfully implemented the _____ strategy.

A)low-cost analyzer
B)differentiated endorser
C)high-cost reactor
D)low-cost reactor

Question 51

Businesses that compete in the global market almost always pursue a(n)_____ strategy.

A)prospector
B)analyzer
C)differentiated defender
D)low-cost defender

Question 52

A(n)_____ offering can rarely be experienced in advance of a sale while a(n)_____ offering can be tested before purchase.

A)intangible;tangible
B)intangible;service
C)tangible;intangible
D)service;intangible

Question 53

_____ are most likely to focus the bulk of their resources on preserving existing positions in established product-markets.

A)Defenders
B)Prospectors
C)Differentiators
D)Reactors

Question 54

Strategic business units which have no clear strategy and do not have as consistent a product-market orientation as its competitors,are referred to as _____ in the Miles and Snow typology.

A)analyzers
B)reactors
C)defenders
D)prospectors

Question 55

The business strategy most likely to have been successful when cordless telephones were first introduced and began to grow as a market was that of the:

A)differentiated defender.
B)low-cost defender.
C)prospector.
D)reactor.

Question 56

The increased share of market that is an indicator of the success of an SBU's products and programs,is the primary objective of both New Edge Inc.and Cutting Edge Inc.If New Edge Inc.increases its market share by 10 percent during a given period,while Cutting Edge Inc.increases its market share by 2 percent,New Edge Inc.can be said to be more:

A)defensive.
B)effective.
C)of a cost leader.
D)sensitive to the environment.

Question 57

According to the Miles and Snow typology,the defender strategic type:

A)is likely to be the "first mover" in new-product market areas.
B)responds rapidly to early signals concerning areas of opportunity.
C)carefully follows a selected set of promising new developments in its industry.
D)attempts to locate and maintain a secure position in relatively stable product or service areas.

Question 58

A(n )_____ business attempts to maintain a strong position in its core product market but also seeks to expand into new-usually closely related-product-markets.

A)analyzer
B)reactor
C)defender
D)prospector

Question 59

Which of the following is true of the reactor strategic type in the context of the Miles and Snow typology?

A)It responds primarily when forced to by environmental pressures.
B)It has a well-defined competitive strategy.
C)It is as willing to assume the risks of new-product development as its competitors.
D)It has as consistent a product-market orientation as its competitors.

Question 60

The success of an SBU's products and programs relative to its competitors in the marketplace is known as that SBU's:

A)adaptability.
B)efficiency.
C)effectiveness.
D)return on sales.

Question 61

Which of the following is true of the differentiated defender strategy?

A)Goals and objectives adaptability is extensive in the case of differentiated defender strategy.
B)They are likely to produce lower returns as compared to low-cost defenders.
C)Conditions are favorable for this strategy when a technology is in its inception stage.
D)They compete by offering more or better choices to customers than do their competitors.

Question 62

Conditions are most likely to be favorable for a differentiated defender business strategy during the _____ stage of the product life cycle.

A)introductory
B)early growth
C)decline
D)booming

Question 63

Conditions favor an analyzer strategy when there are a:

A)moderate number of established competitors and a stable industry structure.
B)few established competitors and a stable industry structure.
C)large number of competitors and a stable industry structure.
D)large number of competitors and an evolving industry structure.

Question 64

Identify and describe the three primary performance dimensions of importance to business unit managers,and provide an example of each from the banking industry.

Question 65

Make a list of the different industries and market structures that are most likely to favor each of the business strategies identified by Miles and Snow.Justify your answer.

Question 66

Identify and describe the four types of business strategies identified by Miles and Snow.Provide an example of each from the fast-food industry,and describe how it illustrates the corresponding strategy.

Question 67

Which types of business strategies are most likely to be successful at each stage of the product life cycle,and why?

Question 68

Which type of strategy is particularly well-suited to an environment in which the industry is in the late growth or early maturity stage of the life cycle?

A)Differentiated defender
B)Low-cost defender
C)Analyzer
D)Prospector

Question 69

Identify the fundamental marketing difference between a differentiated analyzer and a differentiated defender.

Question 70

Which types of executives would you expect to have the greatest power in prospector and low-cost defender organizations? Why?

Question 71

In which of the following strategies is the probability of product-line breadth smaller than the average competitor?

A)Prospector
B)Differentiated defender
C)Low-cost defender
D)Differentiated analyzer

Question 72

Service quality relative to competitors is always lower in the case of _____ strategy.

A)low cost defender
B)differentiated defender
C)differentiated analyzer
D)differentiated prospector

Question 73

Conditions are most likely to be favorable for a prospector business strategy during the _____ stage of the product life cycle.

A)late growth
B)maturity
C)introductory
D)decline

Question 74

All of the following are examples of the product policies of a marketing program EXCEPT:

A)product quality.
B)diversity of product line.
C)transportation medium of the product.
D)the technical sophistication of the product.

Question 75

In the context of the primary performance dimensions,which dimensions are likely to be most important for the prospector firm and the defender firm? Give reasons to support your answer.

Question 76

Conditions are most favorable for an analyzer business strategy when:

A)the basic technology is fully developed and stable.
B)the technology is in its inception stage.
C)the industry's technology is relatively stable.
D)the basic technology is well developed,but still evolving.

Question 77

Differentiated defenders cannot adhere to a policy of low competitive prices because:

A)of higher costs involved in differentiating a business's products.
B)lowering the price would affect the brand image.
C)it always has a very small market.
D)of the lower service quality relative to competitors.

Question 78

Trade promotion expenses as percent of sales is higher relative to competitors in the case of:

A)prospector strategy.
B)differentiated defender strategy.
C)low cost defender strategy.
D)differentiated reactor strategy.

Question 79

In which of the following strategies is the technical sophistication of products always lesser relative to competitors?

A)Prospector strategy
B)Differentiated defender strategy
C)Low-cost defender strategy
D)Differentiated reactor strategy

Question 80

Attempting to maintain tight control over the behavior of channel members is the most essential policy for:

A)prospectors who are exploring new markets.
B)defenders who are trying to maintain strong positions in established markets.
C)analyzers who are pursuing a low-cost policy.
D)defenders who are in the process of switching to the prospector strategy.