Deck 3: Business Strategies and Their Marketing Implications

Question 1

A business pursuing a prospector strategy:

A)concentrates on maintaining its positions in established product markets while paying less attention to new product development
B)focuses on growth through the development of new products and markets
C)attempts to maintain a strong position in its core product markets but also seeks to expand into new product markets
D)does not have a clearly defined strategy

Answer 1

B

Question 2

Strategic business units:

A)are primarily alliances with other competitive firms aimed at new markets
B)are components of a firm engaged in multiple industries or businesses
C)adapt the same growth objectives and competitive strategies as other SBUs
D)are business units that always focus on competing within their industry

Answer 2

B

Question 3

Which performance dimension is usually measured by the number of successful new products introduced relative to competitors or the percentage of sales accounted for by products introduced within the last five years?

A)efficiency
B)effectiveness
C)durability
D)adaptability

Answer 3

D

Question 4

A policy of high service quality is essential for _____,as it offers a way to maintain a competitive advantage in well-established markets.

A)prospectors
B)low-cost defenders
C)differentiated defenders
D)analysers

Question 5

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

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

Question 6

The defender strategy is most useful:

A)for business units with a profitable share of one or more major segments in a relatively mature and stable industry
B)for business units that try to avoid being left behind in newly developing application segments within the market
C)for well-developed units that are still experiencing some growth and change as a consequence of evolving customer needs
D)for unstable units due to fewer competitors and their relative market shares that shift rapidly as new products are introduced

Question 7

Businesses following a reactor strategy:

A)attempt to maintain a stable line of products,but follow a selected set of promising new developments in its industry
B)try to protect their domain by offering lower prices,higher quality or better services than competitors
C)are not as willing to assume the risks of a new product or market development as its competitors
D)respond rapidly to early signals concerning areas of opportunity,which often lead to new rounds of competitive actions

Question 8

A firm ensures that no two SBUs within the firm compete for the same customers with similar products.Which SBU characteristic is being discussed here?

A)a homogeneous set of markets to serve with a limited number of related technologies
B)controlling factors that are essential for successful performance
C)a unique set of product markets
D)responsibility for their own profitability

Question 9

Identify the correct statement concerning the distribution policies.

A)Prospector's need for motivation of distribution channel members is accomplished through tight control of business-owned channels.
B)Maintaining tight control over the behaviour of channel members is an appropriate policy for prospectors who rely on customer service.
C)Defenders are likely to devote a larger percentage of sales to trade promotions than the prospector businesses.
D)Defenders rely on trade promotion tools and other incentives to induce support from their independent channel members.

Question 10

Which of the following is not a dimension that defines the scope and mission of an individual SBU?

A)technical compatibility
B)similarity of competitors
C)similarity of customer needs
D)similarity of personal characteristics of customers in the target markets

Question 11

Which of the following are most likely to be involved in a strategy of high forward vertical integration with regards to their distribution policies?

A)differentiated defenders
B)diversified prospectors
C)customer-oriented analysers
D)All of the given answers are correct.

Question 12

Emerson Electric formed an operating group of several otherwise autonomous business units that make different types of electrical motors and tools.By sharing production facilities,marketing activities and a common sales force,the group was able to reduce the costs of both per-unit production and marketing.Emerson Electric is trying to:

A)gain operating synergies through sharing resources
B)preserve its position in established product markets
C)generate excess cash to support its product and market development efforts
D)devote a proportion of resources to the development of new product markets

Question 13

Which business strategy is followed by a business that attempts to maintain a strong position in its core product market but also seeks to expand into new-usually closely related-product markets?

A)prospector strategy
B)analyser strategy
C)low-cost defender strategy
D)reactor strategy

Question 14

When the Pillsbury Company rejected the proposal of their employee James

A)prospector strategy
B)reactor strategy
C)analyser strategy
D)Watkins that microwavable packaged food was too risky,it was focused on defending its strong position in the marketplace through incremental line extensions and product improvements.This is typical of a(n):
D)diversification strategy

Question 15

42BELOW-a wheat vodka made by a small distillery in New Zealand-has captured a share of the prestige segment of the market,especially hotels such as the Ritz in London and El Bulli in Spain.Identify the strategy used by the firm.

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

Question 16

Which environmental factor is conducive to the prospector strategy?

A)industry in early growth stage
B)industry in late growth or early maturity stage
C)industry in maturity stage
D)industry in decline stage

Question 17

Which of the following observations is not true of services?

A)They can be thought of as intangibles.
B)Intangibles can rarely be experienced in advance of the sale.
C)They can be tested even before purchase.
D)Almost all businesses are engaged in service to some extent.

Question 18

Which of the following best describes the effectiveness performance dimension?

A)the success of a business's products and programs relative to those of its competitors in the market
B)the outcome of a business's programs relative to the resources used in implementing them
C)the business's success in responding over time to changing conditions and opportunities in the environment
D)the percentage of sales accounted for by products introduced within the last five years

Question 19

3M consumer product group introduced Scotch-Brite Never Rust soap pads made from recycled plastic beverage bottles.Its objective was to capture a major share of the soap pad market and maximise Never Rust's volume growth.The firm's top managers approved a major investment in a new plant and a substantial introductory advertising budget.At the same time,the consumer group maintained high profitability goals for its other established products to provide the cash required for Never Rust's introduction and preserve the group's overall profit level.Identify the business strategy employed here.

A)A firm breaking down its corporate objectives into subobjectives for each SBU.
B)A firm's subobjectives are consistent across the various SBUs.
C)A firm's subobjectives are used only for the existing product market within the unit.
D)A firm using value-based planning as a tool for evaluating alternative resource allocations.

Question 20

According to Michael Porter,a business that avoids direct confrontation with its major competitors by concentrating on narrowly defined market niches is using the ______ strategy to gain and maintain competitive advantage.

A)overall cost leadership
B)differentiation
C)focus
D)segmenting

Question 21

Several analysts propose that as a result of the internet,pursuing a strategy focused on quality differentiation will become the most viable option for companies seeking competitive advantage.

Question 22

Explain the appropriate conditions for a prospector strategy.

Question 23

Michael Porter describes firms that lack a distinctive strategy as being 'stuck on the outside'.

Question 24

A business's competitive strategy and the strategic marketing programs of its product or service offerings are independent of one another.

Question 25

The internet will make it easier for firms to customise their offerings and personalise their relationships with their customers.

Question 26

A marketing manager has an idea for an innovative new product with huge market potential but in a different industry segment requiring a prospector strategy.However,since this strategy conflicts with the low-cost defender strategy currently deployed by the manager's strategic business unit,the manager's best option is to not proceed with developing the new product.

Question 27

What are the characteristics of strategic business units? Identify the dimensions that define the scope and mission of individual SBUs in a firm.

Question 28

The Miles and Snow combined typology of business-level competitive strategies is universal in that it can be applied to various types of firms,be they small or large firms; services only firms or firms that compete in global markets.

Question 29

Emirates Airline has been classified as a differentiated analyser because:

A)It offers a high level of customer service while charging a price premium.
B)It has differentiated its service offering to include hotels and resorts around the world.
C)It pursues both established and new markets.
D)It is consistently at the forefront in opening new destinations while closing down old ones.

Question 30

Business strategies are primarily concerned with allocating resources across functional activities and product markets to give the unit a sustainable advantage over its competitors.

Question 31

Firms pursuing a reactor strategy usually can still be successful and achieve competitive advantage in the short term.

Question 32

A strategic issue for SBUs is how their strategy influences the amount of resources committed to marketing and ultimately the budget available.