Question 1

Which core defensive strategy is appropriate for a business with a very strong competitive advantage operating in a very attractive market?
A)a harvest strategy
B)a monetize strategy
C)an optimize strategy
D)a protect strategy
E)an invest strategy

Accepted Answer

A protect strategy is appropriate for a business with a strong competitive advantage operating in an attractive market because it focuses on maintaining and defending the existing competitive position. This involves protecting market share, strengthening brand awareness, patents, and proprietary technologies, ensuring that the product or service remains relevant and differentiating the business from competitors. This strategy helps to maintain the business's position in the market and prevent competitors from catching up, ensuring the long-term sustainability of the business.

Question 2

A divest price strategy continues to raise prices slowly with expected decreases in volume until the business has exited the market.

Accepted Answer

A divest price strategy involves lowering prices to sell off remaining inventory and exiting the market as quickly as possible, rather than raising prices slowly. This is because the goal is to eliminate any ties to the business and move on to other areas of focus.

Question 3

The reduce-market-focus strategy prescribes a defensive strategic market plan that involves narrowing market focus and trimming market share in an effort to improve profit performance.

Accepted Answer

The statement accurately describes the reduce-market-focus strategy, which is indeed a defensive strategic market plan that involves narrowing market focus and reducing market share in order to improve profit performance.

Question 4

It is during the early stages of market growth that maximum marketing profits are obtained.

Accepted Answer

Maximum marketing profits are typically obtained during the maturity stage of the market when the product has established itself, competition is understood, and companies optimize their marketing strategies and operations for efficiency.

Question 5

A defensive strategy to protect market share is the same as a hold-resources-constant strategy.

Accepted Answer

A defensive strategy to protect market share involves actions such as improving product quality, aggressive advertising, and price adjustments to fend off competitors, whereas a hold-resources-constant strategy focuses on maintaining current resource levels without necessarily taking proactive measures to combat competition.

Question 6

In general,businesses in high-share positions in growing or mature markets will use which type of strategic market plans to maintain cash flow that supports short-run profit performance and shareholder value?
A)offensive strategic market plans
B)defensive strategic market plans
C)decentralized strategic market plans
D)concentrated strategic market plans
E)multi-segment strategic market plans

Accepted Answer

Businesses in high-share positions in growing or mature markets typically use defensive strategic market plans to maintain cash flow that supports short-run profit performance and shareholder value. Defensive strategies focus on protecting current market share and defending against competitors' attacks. Offensive strategies, on the other hand, focus on aggressive growth and expanding market share, which may not be necessary for businesses already in high-share positions. Decentralized, concentrated, and multi-segment strategic market plans are not necessarily associated with maintaining cash flow in a high-share position.

Question 7

Which of the following core defensive strategies is appropriate when a business is operating in a very unattractive market and has a very weak competitive advantage?
A)a harvest strategy
B)a monetize strategy
C)an optimize strategy
D)a protect strategy
E)an invest strategy

Accepted Answer

In a very unattractive market and with a weak competitive advantage, it may be best for the business to focus on maximizing short-term profits and minimizing costs. This is exactly what a harvest strategy entails. The business can maximize its profits by cutting back on investments and focus on selling off its assets. The goal is to maximize its returns from the business in the short term, which is appropriate in such a market.

Question 8

All defensive strategies are intended to maximize or protect short-run profits.

Accepted Answer

The answer of All defensive strategies are intended to maximize...

Question 9

The primary goal of a defensive strategy is to protect profitability and key strategic share positions that are worth the investment.

Accepted Answer

The statement is true. A defensive strategy is focused on maintaining profitability and protecting market share, rather than aggressive growth. This can involve tactics such as cost-cutting, divesting non-core assets, and targeted marketing to maintain a stronghold in key markets.

Question 10

In general,businesses in high-share positions in growing or mature markets will use defensive strategic market plans to maintain cash flow that supports short-run profit performance and shareholder value.

Accepted Answer

Defensive strategic market plans are commonly used by businesses in high-share positions in growing or mature markets to maintain their market share and cash flow, which in turn supports short-run profit performance and shareholder value. These plans may involve actions such as increasing promotions, reducing prices, and improving customer service to retain customers and stay ahead of competitors.

Question 11

Followers with above-average profits tend to invest more aggressively in marketing as a percentage of sales,as well as on a relative basis when compared with competitors with below-average profits.

Accepted Answer

This statement is true. Companies with above-average profits tend to have more resources available to invest in their marketing efforts, and they may view marketing as a key driver of their success. As a result, they often allocate a larger percentage of their sales toward marketing and may spend more aggressively than their competitors with lower profits.

Question 12

A divestment strategy,while unattractive,is always feasible.

Accepted Answer

A divestment strategy may not always be feasible depending on the specific circumstances, such as the availability of potential buyers, market conditions, and legal restrictions.

Question 13

Share leaders,followers,and niche businesses can all pursue defensive strategies to protect their market share positions.

Accepted Answer

All types of businesses can potentially face threats to their market share, and defensive strategies can be employed to protect against these threats. Examples of such strategies include improving customer loyalty, investing in research and development, improving product quality, offering price incentives, and creating barriers to entry for potential competitors.

Question 14

A firm plans to use a defensive core strategy of optimize position,with the strategic objective of maximizing profits.Which of the following strategies is the firm most likely to implement as a part of its core strategy?
A)enter new related markets
B)reduce market focus
C)develop new markets
D)divest for cash flow
E)harvest for cash flow

Accepted Answer

The answer of A firm plans to use a defensive...

Question 15

The fundamental objective of all share leaders is to invest to protect market share.

Accepted Answer

The answer of The fundamental objective of all share leaders...

Question 16

Maintaining a high-share position in an attractive,growing market requires only minimal investment to sustain a competitive advantage.

Accepted Answer

Maintaining a high-share position in an attractive, growing market typically requires ongoing investment to sustain the competitive advantage, as competitors will be constantly trying to improve and capture market share.

Question 17

The strategic objective in the protect position defensive core strategy is to maximize profits.

Accepted Answer

The strategic objective in the protect position defensive core strategy is to minimize losses and protect existing market share, not necessarily to maximize profits.

Question 18

A firm plans to use a defensive core strategy of protect position,with the strategic objective of maintaining profits.Which of the following strategies is the firm most likely to implement as a part of its core strategy?
A)build customer retention
B)enter new related markets
C)harvest for cash flow
D)divest for cash flow
E)develop new markets

Accepted Answer

Building customer retention is a strategy that focuses on keeping existing customers satisfied and engaged with the company's products or services, which aligns with the objective of maintaining profits under a defensive core strategy of protecting position.

Question 19

A business that is able to build a higher level of customer retention can be more profitable than another business,even when both have the same market share.

Accepted Answer

Customer retention refers to the ability of a business to keep its existing customers. A business that has higher customer retention will have a stable customer base and will not need to spend as much money on attracting new customers. This can lead to increased profitability as the cost of customer acquisition is usually high. Therefore, a business that can build a higher level of customer retention can be more profitable than another business, even when both have the same market share.

Question 20

The first step in optimizing net marketing contribution is to focus on optimal management of price-volume rather than margin-volume.

Accepted Answer

The first step in optimizing net marketing contribution often involves focusing on margin-volume optimization rather than solely on price-volume, as it's crucial to understand how different levels of output affect both the costs and the revenues, thereby impacting the margins.

Quiz 13: Defensive Strategies

Which core defensive strategy is appropriate for a business with a very strong competitive advantage operating in a very attractive market?