Deck 12: Offensive Strategies

Question 1

As a business approaches 100 percent of its share development index,additional growth based on market share gains becomes increasingly difficult.

Answer 1

True

Question 2

Defensive strategic market plans are usually growth oriented and are more appropriate for the growth stage of a product-market life cycle.

Answer 2

False

Question 3

A low level of market attractiveness requires an offensive strategic market plan.

Answer 3

False

Question 4

One of the primary advantages of an unrelated new market entry strategy is decreased market dependency.

Question 5

Which of the following strategic market plans is more likely to occur in the latter stages of a product-market life cycle and is often designed to protect important share positions and be a large contributor to short-run sales revenues and profits?

A)disintermediation strategies
B)defensive strategies
C)offensive strategies
D)centralization strategies
E)decentralization strategies

Question 6

For any business,retaining a higher percentage of customers and improving their loyalty is an offensive strategic investment that not only affects short-term profits but also greatly enhances long-run performance.

Question 7

High-technology markets have rapidly emerging market demand and relatively short product and market life cycles.

Question 8

Which of the following strategic market plans are usually growth-oriented and are more likely to occur in the growth stage of a product-market life cycle?

A)disintermediation strategies
B)defensive strategies
C)centralization strategies
D)decentralization strategies
E)offensive strategies

Question 9

The combination of ________ and ________ creates a portfolio position for any given product-market.

A)market attractiveness;competitive advantage
B)marketing expenditure;sales revenue
C)market share;sales revenue
D)cost of production;competitive advantage
E)brand awareness;financial advantage

Question 10

The combination of market attractiveness and competitive advantage creates a portfolio position for any given product-market.

Question 11

A share development index (SDI)equal to 35 means that the maximum market share a business can attain is 35 percent.

Question 12

Entry into emerging markets requires significant investment to develop demand.

Question 13

A growth strategy to develop an untapped new-market potential offers both high risk and the possibility of high return.

Question 14

Which type of strategic market plan is most appropriate for businesses operating in a market that has very low market attractiveness score?

A)a pulsing strategy
B)a defensive strategy
C)a disintermediation strategy
D)a decentralization strategy
E)an offensive strategy

Question 15

Which of the following is true about an offensive strategic market plan?

A)It is inappropriate for a market with high market attractiveness and low competitive advantage.
B)It is used for entering a new market with no established share position.
C)It is appropriate if a business wants to improve profits by optimizing its market focus with minimal investment.
D)It is used to protect the current position of a business.
E)It is used in markets with market attractiveness below 20 where the business has low competitive advantage.

Question 16

During the rapid-growth phase of market development,customer needs become more salient and numerous,and segments begin to form.

Question 17

The objective of offensive strategic market plans is to produce sales growth and improve share position and future profit performance.

Question 18

The core offensive strategies are "invest to grow","improve position",and "new market entry".

Question 19

An MDI of 62 indicates that the market has many potential customers who for various reasons have not entered it.

Question 20

The share development index (SDI)is the ratio of share potential to actual sales.

Question 21

The ________ is the ratio of the market share index to the share potential index.

A)share development index (SDI)
B)market development index (MDI)
C)business share index (BSI)
D)market share index (MSI)
E)sales growth index (SGI)

Question 22

Which of the following is a factor used to determine the share potential index?

A)product attractiveness
B)market potential
C)product quality
D)market demand
E)product awareness

Question 23

Lucy has determined that along the share-development path,her business should perform at a 74% level of product awareness,68% in product preference,92% in intentions to purchase,and 85% in rate of purchase.If the share potential index for Lucy's business is 18%,at what level of product availability should her business perform?

A)94%
B)81%
C)72%
D)59%
E)46%

Question 24

Which of the following fundamental offensive strategic market plans is most likely be pursued in the core strategy of invest to enter new markets?

A)enter new market segment
B)improve customer loyalty
C)develop new markets
D)build marketing advantage
E)expand market demand

Question 25

Maurice has determined that along the share-development path,his business should perform at a 90% level of product awareness,80% in product preference,50% in intentions to purchase,80% in product availability,and 70% in rate of purchase.What is the approximate share potential index for Maurice's business?

A)20%
B)37%
C)45%
D)50%
E)74%

Question 26

A business with a share development index equal to 45 means that the business ________.

A)can only achieve 45 percent of the total market share
B)achieved a 45 percent growth in market share
C)achieved only 45 percent of its share potential index
D)achieved a 45 percent growth in competitive advantage
E)has to achieve 45 percent more in market share to reach its potential market share

Question 27

Norton has determined that along the share-development path,his business should perform at an 85% level of product awareness,76% in product preference,68% in product availability,and 92% in rate of purchase.If the share potential index for Norton's business is 25%,at what level of purchase intentions should his business perform?

A)55%
B)97%
C)83%
D)74%
E)62%

Question 28

Martha has determined that along the share-development path,her business should perform at a 91% level of product awareness,73% in product preference,86% in intentions to purchase,and 76% in product availability.If the share potential index for Martha's business is 26%,at what level of purchase rate should her business perform?

A)90%
B)80%
C)70%
D)60%
E)50%

Question 29

A business's market share is 6% and it has a share development index of 72.Calculate its share potential index.

A)14.6%
B)22.8%
C)36%
D)18.5%
E)8.3%

Question 30

The growth in the gaming console market led to the emergence of a gaming consoles segment for products priced under $1,000.Though its current product line-up begin at $3,000,Sentinel Inc. ,an American gaming equipment manufacturer,responded to this need by launching a product,the Cerebro Console,priced at $920,designed for the price-performance needs of the segment.Which of the following offensive strategies did Sentinel Inc.use?

A)improve customer retention
B)improve customer loyalty
C)enter new market segments
D)harvest for cash flow
E)divest for cash flow

Question 31

A firm uses a core offensive strategic market plan of investing to improve competitive position.The strategic objective of the firm is to improve margins.Which of the following strategies is the firm most likely to use?

A)reduce market focus
B)harvest for cash flow
C)enter unrelated new markets
D)divest for cash flow
E)improve marketing productivity

Question 32

Delta Motors,an American multinational automaker,was the first company to develop an affordable electric car.Delta Motors aimed to diversify its growth by launching an environment-friendly,affordable electric car.Which of the following offensive strategies is Delta Motors pursuing?

A)enter related new market segments
B)harvest for cash flow
C)divest for cash flow
D)enter unrelated new market segments
E)improve customer loyalty

Question 33

Victor has determined that along the share-development path,his business should perform at a 90% level of product awareness,75% in intentions to purchase,75% in product availability,and 65% in rate of purchase.If the share potential index for Victor's business is 30%,at what level of product preference should his business perform?

A)52%
B)60%
C)73%
D)91%
E)82%

Question 34

Which of the following formulas is used to calculate the share development index?

A)Share Development Index = Market Share Index/Share Potential Index
B)Share Development Index = Cost Advantage Index + Product Advantage Index
C)Share Development Index = Product Intentions Index + Total Market Share
D)Share Development Index = Cost Advantage Index/Product Advantage Index
E)Share Development Index = Total Market Share/Product Advantage Index

Question 35

Bruce has determined that along the share-development path,his business should perform at a 70% level of product awareness,80% in product preference,60% in intentions to purchase,90% in product availability,and 80% in rate of purchase.His business's share development index is 25.What is the business's approximate market share index?

A)6%
B)20%
C)32%
D)45%
E)64%

Question 36

The ________ is equal to current market demand divided by market potential.

A)share development index (SDI)
B)market development index (MDI)
C)business share index (BSI)
D)market share index (MSI)
E)sales growth index (SGI)

Question 37

Kate has determined that along the share-development path,her business should perform at a 85% level of product awareness,75% in product preference,60% in intentions to purchase,90% in product availability,and 70% in rate of purchase.Kate's share development index is 50.What is the market share index for Kate's business?

A)12%
B)6%
C)18%
D)22%
E)28%

Question 38

A firm uses a core offensive strategic market plan of investing to grow sales in existing markets.The strategic objective of the firm is to grow in existing markets.Which of the following strategies is the firm most likely to use?

A)reduce market focus
B)harvest for cash flow
C)enter related new markets
D)divest for cash flow
E)expand market demand

Question 39

Alex has determined that along the share-development path,his business should perform at an 80% level in product preference,50% in intentions to purchase,90% in product availability,and 70% in rate of purchase.If the share potential index for Alex's business is 20%,at what level of product awareness should his business perform?

A)63%
B)80%
C)54%
D)88%
E)42%

Question 40

Helen has determined that along the share-development path,her business should perform at a 80% level of product awareness,50% in product preference,80% in intentions to purchase,90% in product availability,and 70% in rate of purchase.Helen's actual market share is equal to 9%.What is the approximate share development index (SDI)for Helen's business?

A)20
B)37
C)45
D)50
E)74

Question 41

With few,if any,competitors in an untapped new market,a business has the opportunity to pioneer a portion of the market largely ignored by competitors.This is known as ________.

A)network advantage
B)economies of scale advantage
C)horizontal integration advantage
D)first-mover advantage
E)vertical integration advantage

Question 42

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
Mini-Case Question.Clarion Inc.has focused its product-market strategies on large manufacturers,that have sales exceeding $100 million per year and that purchase large-scale,multi-million dollar equipment.However,research conducted by the marketing department identifies a fairly attractive market potential for Clarion manufacturing equipment among smaller manufacturers.Clarion Inc.produces a line of lower capacity manufacturing equipments,with a pricing strategy aimed at catering to the needs of the small manufacturers.In this example,Clarion Inc.uses a ________ strategy.

A)improve customer loyalty and retention
B)develop a new market
C)enter new-market segments
D)harvest for cash flow
E)divest for cash flow

Question 43

Ridgewell Inc.was a pioneer in the cleaning equipment market and sold their products exclusively through a direct marketing approach.However,after extensive market research,the firm realized that the majority of sales in this market occurred in retail stores.To improve its performance,Ridgewell Inc.began selling through specialty cleaning equipment retailers as well as multiple mass market cleaning equipment stores.Which of the following offensive strategies does this represent?

A)entering related new market segments
B)building marketing advantage
C)harvesting for cash flow
D)divesting for cash flow
E)lowering costs

Question 44

Which of the following terms refers to businesses that emulate the dominant design and enter the market after letting another firm invest in developing the technology,establishing the design standard,and initiating market development?

A)pioneers
B)first-movers
C)market leaders
D)early followers
E)technological leaders

Question 45

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
Mini-Case Question.What is the share development index (SDI)of Clarion Inc.?

A)18
B)85
C)43.6
D)77.8
E)97

Question 46

When pioneers set a standard that other businesses entering the market must follow in order to compete,the standard is referred to as a ________.

A)competitive lead
B)functional lead
C)dominant design
D)functional design
E)dominant lead

Question 47

What does it mean if the market development index is equal to 60?

A)There is only 60% potential market share available for businesses in this industry.
B)This is a highly saturated industry and there is little room for growth.
C)There are many potential customers who have not entered the market.
D)The average market share for businesses operating in this industry is 60%.
E)The maximum market share that any business operating in this industry can attain is equal to 60%.

Question 48

Name and describe the four fundamental offensive strategic market plans that can be used to increase a business's penetration of an existing market.

Question 49

The current market demand for flat-screen TVs is 4 million units per year.It is estimated that the market potential for this industry is expected to be 25 million units.What is the market development index for this industry?

A)-21
B)16
C)21
D)84
E)625

Question 50

Which of the following statements is true regarding choosing offensive strategic market plans?

A)A business with a good cash position that is facing stagnant growth in maturing markets might pursue the market penetration strategy.
B)A market-based business will often find that it has more resources to fund market opportunities than there are market opportunities.
C)A business with a long-run need for better profit performance would be inclined to select the share penetration strategy.
D)The selection of one offensive strategic market plan over another depends on the business's long-run profit needs.
E)A business has to prioritize strategic market opportunities on the basis of its performance objectives.

Question 51

Aster Inc.is an American firm that manufactures motorcycles under the brand name AsterBikes.The firm conducts a market research to identify alternative sources of sales growth by leveraging its core competencies and competitive advantages.Based on its market research and analysis,the firm decides to enter the automobile industry,and introduces a line of Aster ComfortCars.In this example,Aster Inc.is using which of the following offensive strategies?

A)enter unrelated new markets
B)develop new markets
C)harvest for cash flow
D)divest for cash flow
E)enter related new markets

Question 52

Costigan's Skates Inc. ,a firm that manufactures and exports skateboards,wants to grow financially,but decides that the market for skateboards is fairly saturated.The firm's management team decides to expand into manufacturing snowboards,as they believe the Costigan brand will have credibility in this area and the market will not be saturated.In this example,Costigan's Skates Inc.is using the ________ offensive strategy.

A)divest for cash flow
B)enter related new markets
C)develop new markets
D)harvest for cash flow
E)enter unrelated new markets

Question 53

Which of the following statements is true of a "new emerging market"?

A)It refers to a market with very high levels of competition.
B)It refers to a market where the number of current customers is small.
C)It refers to a market that has very low market potential.
D)It refers to a market that is completely saturated,and does not provide much growth potential.
E)It is characterized by low levels of risk.

Question 54

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
Mini-Case Question.Calculate the share development index (SDI)for Clarion Inc.for an 8 percent reduction in market share.

A)78
B)92
C)56
D)34.6
E)15.7

Question 55

Which of the following allows a business the potential to own the market until other competitors venture to enter?

A)a decentralization strategy
B)the cluster effect
C)a low barrier to entry
D)a first-mover advantage
E)a network effect

Question 56

Shockwave Services is a mobile service providing company based in Chicago.In order to expand its market,the firm acquires a travel agency in Chicago that provides tourist packages at low prices.Which of the following offensive strategies is Shockwave Services pursuing?

A)divest for cash flow
B)enter related new markets
C)develop new markets
D)harvest for cash flow
E)enter unrelated new markets

Question 57

The maximum market demand for running shoes is 560 million and its worldwide market development index is 75.Calculate the current market demand for running shoes.

A)75 million
B)150 million
C)240 million
D)320 million
E)420 million

Question 58

Give three reasons why,at some point,every business needs to examine growth opportunities outside the markets it serves.Name and describe four fundamental offensive strategic market plans for entering new markets.

Question 59

A growth strategy to develop an untapped new market potential offers ________ and the ________.

A)low risk;potential for high return
B)high risk;potential for high return
C)low risk;potential for low return
D)high risk;potential for low return
E)low risk;potential for increased competition

Question 60

The current market demand for paper clips is 320 million and its market development index is 55.Calculate the approximate market potential for paper clips.

A)463 million
B)582 million
C)694 million
D)720 million
E)838 million