Deck 2: Strategic Planning for Competitive Advantage

Question 1

A group of individuals in the age group of 11 to 16 years who extensively use the Internet is an example of a market segment.

Answer 1

True

Question 2

A business mission does not affect a firm's long-run resource allocation, profitability, and survival.

Answer 2

False

Question 3

Eldams Inc., a technological firm, started producing a new gaming console for its domestic market. This shows that Eldams Inc. has adopted a diversification strategy.

Answer 3

False

Question 4

By manipulating elements of the marketing mix, marketing managers can fine-tune the customer offering and achieve competitive success.

Question 5

According to the General Electric model for strategic alternatives, conditions that have low overall attractiveness are the best candidates for investment.

Question 6

According to Ansoff's strategic opportunity matrix, both product development and diversification entail the creation of new products.

Question 7

Marketing objectives serve as motivators by creating something for employees to strive for.

Question 8

A strategic business unit (SBU) is a single business or a collection of related businesses.

Question 9

The creation and implementation of a marketing plan will allow the organization to achieve marketing objectives and succeed.

Question 10

In terms of effect strategic planning, managers should refrain from establishing new strategies.

Question 11

Marketing objectives must be consistent with and indicate the priorities of an organization.

Question 12

RegiSure is a strategic business unit that shows low growth but has a dominant market share. Since it has a dominant market share, it must be additionally financed despite its low growth.

Question 13

Marketing strategy involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.

Question 14

A diversification strategy is free of risk when a firm is entering unfamiliar markets.

Question 15

Fresnas Inc. introduced a new line of smartphones in the market. As it is expected to generate huge profits and needs more financing, the new line of smartphones can be categorized as dogs.

Question 16

Unlike an operating decision, a strategic decision probably will not have a big impact on the long-run profitability of a company.

Question 17

The best marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency.

Question 18

Environmental scanning refers to the process of collecting and interpreting information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.

Question 19

Adjacent innovation involves decisions that result in brand-new markets, products, and often new businesses by relying on new, unfamiliar assets to develop the type of breakthrough decisions that fall in this category.

Question 20

Market segments cannot be differentiated by ethnicity and multicultural aspects.

Question 21

A firm's assets are functions-customer service and promotions-that the firm performs better than its competitors.

Question 22

In a target market strategy, identifying the market segment or segments begins with a market opportunity analysis (MOA).

Question 23

The key to having a sustainable competitive advantage is having a product that can be imitated by a competitor.

Question 24

SharpSheets is a paper manufacturing company that sells products made of recycled materials. No other paper manufacturing company in the market has the ability to replicate its products. SharpSheets has a competitive advantage in this scenario.

Question 25

A company's skills include patents, copyrights, and technology that are superior to those of the competition.

Question 26

Target markets can be selected only by appealing to the entire market with one marketing mix, concentrating on one segment.

Question 27

In the context of a marketing mix, which of the following business activities is closely associated with promotion?

A)Usage of social media to increase products sales
B)Deciding to increase prices of products
C)Changing the appearance of the product packaging
D)Ways to improve product quality

Question 28

Which of the following companies has most likely adopted a product/service differentiation competitive advantage?

A)A firm that sells its products at lower costs than its competitors
B)A firm that inhibits post-sale customer service relations
C)A firm that provides highly reliable products
D)A firm that solely relies on promotional strategies to increase its sales

Question 29

In the context of the innovation matrix, decisions taken at the _____ level implement changes that use existing assets to provide added convenience to existing customers, and potentially entice customers from other brands.

A)divestment
B)diversification
C)adjacent innovation
D)core innovation

Question 30

In the context of implementation, which of the following statements is true of a task force?

A)Authority is equally vested in each employee.
B)It is established to accomplish a single goal or mission.
C)It works independent of a specific deadline.
D)Task force is set up for simple rather than strategic plans.

Question 31

A competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition.

Question 32

Critics of Ansoff's matrix mention that the matrix does not:

A)provide firms with different marketing strategies.
B)reflect the reality of how businesses grow.
C)match products with various types of markets.
D)outline clear-cut sectors outlined for businesses.

Question 33

Which of the following strategies can enable companies to gain a cost competitive advantage?

A)Removing frills from products
B)Focusing on serving marginal customers
C)Eliminating reverse engineering efforts
D)Developing additional exclusive functional departments

Question 34

Unlike market penetration, diversification is not profitable when a firm enters markets with prominent competition.

Question 35

Freulia Inc. manufactures and sells stationery and office supplies. The firm begins to lose its competitive advantage with the entry of new competitors. In this case, in order to gain a sustainable competitive advantage, Freulia Inc. should:

A)imitate the products of its competitors.
B)depend on government subsidies.
C)develop the skills and assets of the organization.
D)aim at being the low-cost competitor in the industry.

Question 36

Imitating a rival's competitive advantage requires a company to first identify the rival's competitive advantage.

Question 37

Which of the following is a distinct feature of a product/service differentiation competitive advantage?

A)Using government subsidies
B)Controlling overhead costs
C)Establishing a brand name
D)Obtaining inexpensive raw materials

Question 38

Remvault Dairies witnessed a steady decline in the sales of its products due to increased competition in the local market. Remvault Dairies plans to adopt the market development strategy. In this scenario, which of the following is the best step the company should take in an attempt to rejuvenate its financial losses?

A)Introduce new products into new markets.
B)Create new products for its present markets.
C)Attract existing customers rather than new customers.
D)Focus on promoting new uses for old products.

Question 39

A task force is a tightly organized unit under the direction of a manager who, usually, has broad authority.

Question 40

The product in a marketing mix includes:

A)the point of purchase.
B)the company image.
C)personal selling.
D)sales promotion.

Question 41

The price component of a marketing mix is:

A)a competitive weapon for companies.
B)a basis to obtain a product differentiation advantage.
C)the starting point of the marketing mix.
D)the least flexible element of the marketing mix.

Question 42

A product/service differentiation competitive advantage can be achieved by:

A)using inexpensive raw materials.
B)having a strong dealer network.
C)having low overhead costs.
D)creating generic products.

Question 43

Unlike a product/service differentiation competitive strategy, a niche strategy:

A)is suitable for small companies with limited resources.
B)is opted in a market segment that has low growth potential.
C)aims at being the low-cost competitor in an industry.
D)removes frills and options from a product or service.

Question 44

Fourlotts Inc. is a renowned technological firm. It controls many strategic business units (SBUs). In this case, each SBU:

A)has its own return on investment.
B)shares the same goals and use the same strategies as Fourlotts Inc.
C)plans collaboratively with Fourlotts Inc.'s other SBUs.
D)refrains from performing manufacturing functions.

Question 45

Magnira Inc. plans to implement a market penetration strategy to increase its market share. According to Ansoff's strategic opportunity matrix, which of the following scenarios is most likely to happen?

A)Magnira Inc.will try to attract new customers to its products.
B)Magnira Inc.will try to increase its market share among existing customers.
C)Magnira Inc. will create new products for its existing customers.
D)Magnira Inc. will move away from its core capabilities and diversify its business.

Question 46

_____ is the strategy of preserving market share so that an organization can take advantage of very positive cash flow.

A)Building
B)Holding
C)Harvesting
D)Divesting

Question 47

Unlike a cost competitive advantage, a sustainable competitive advantage:

A)is not attractive because of its durability.
B)cannot be copied by the competition.
C)lowers costs by removing frills.
D)does not offer any low-priced products.

Question 48

In the context of the Boston Consulting Group's (BCG's) portfolio matrix, a _____ is a strategic business unit that generates more cash than it needs to maintain its market share.

A)problem child
B)dog
C)star
D)cash cow

Question 49

MaxNutri Inc. sells cookies and nutrition bars. The marketers at MaxNutri Inc. are trying to come up with new and attractive packaging designs for its cookies. In this scenario, MaxNutri Inc. is working on its _____.

A)purchase strategy
B)distribution strategy
C)advertising strategy
D)product strategy

Question 50

Which of the following statements is true of a marketing audit?

A)It should be carried out on a regular schedule.
B)It is normally conducted by an outside party and restricts an inside party of a firm.
C)It covers just the trouble spots of an organization.
D)It is a device to implement a marketing plan.

Question 51

Which of the following statements is true of effective strategic planning?

A)Subordinates must persuade the management to accept their demands.
B)Managers should challenge assumptions about the firm and the environment.
C)Sound strategic planning is based on trial and error method of effective execution.
D)Companies should refrain from establishing new strategies to improve productivity.

Question 52

In the context of the portfolio matrix, which of the following statements is true of dogs?

A)Protection of existing market shares is essential for dogs.
B)Dogs have a dominant market shares in low growth markets.
C)Typical marketing strategies for dogs are to harvest or divest.
D)Dogs are escalated in the market by strong financial funding.

Question 53

Revel Inc., a cell phone manufacturer, decides to launch its new range of smartphones on the company's official Web site so that its logistics issues can be solved. With this modification, its customers can now buy the smartphones even if they are not sold in any of the stores in their locality. In this case, Revel Inc. focuses on the _____ element of the marketing mix.

A)evaluation
B)promotion
C)price
D)distribution

Question 54

Nessca Inc. is a pharmaceutical company. It follows a target market strategy because its products are designed to suit the needs of a group of people with similar characteristics. In this case, which of the following market segments can be targeted by Nessca Inc.?

A)A group of individuals who are diabetic
B)A group of individuals who work in the same organization
C)A group of individuals who are working professionals
D)A group of individuals who reside in the same residential area

Question 55

In the context of the innovation matrix, _____ are decisions designed to take company strengths into new markets.

A)transformational innovations
B)retroactive innovations
C)adjacent innovations
D)core innovations

Question 56

Which of the following should be the main focus of marketers in accordance with distribution strategies?

A)Market segments to be targeted
B)Medium to be used for advertising
C)Products to be manufactured
D)Physical locations of products

Question 57

Synergy Corp., a large seller of energy-efficient light bulbs, uses extensive promotional strategies to stimulate sales. The marketers at Synergy Corp. have noticed that a competitor is doing well and is steadily gaining a large market share. They want to counter the competitor immediately by increasing the sales of Synergy Corp.'s bulbs. In this case, which of the following steps is the quickest step that the marketers at Synergy can take to stimulate the sales of its products?

A)Changing the pricing strategy.
B)Creating complex production techniques.
C)Entering into new supplier contracts.
D)Adopting a divesting strategy.

Question 58

_____ is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

A)Divesting
B)Planning
C)Holding
D)Harvesting

Question 59

Which of the following is an element of a marketing mix?

A)Pricing strategies
B)Divestment strategies
C)Investment strategies
D)Trade restraint strategies

Question 60

In the context of marketing planning, implementation involves:

A)allocating resources.
B)identifying market segments.
C)defining the business mission.
D)assessing internal capabilities of a firm.

Question 61

Delat Corp. is a large corporation that offers several product lines. On the company's Web site, the following content is highlighted: "The aim of our business is to achieve profitability by offering our customers high-quality products that are manufactured in a cost-effective manner. Our goals are to provide value to our customers, serve the community, and preserve the environment." This content is most likely to be Delat Corp.'s _____.

A)article of incorporation
B)statement of qualification
C)scenario planning
D)mission statement

Question 62

A marketing mix typically involves:

A)distribution strategies.
B)divestiture strategies.
C)restrictive covenants.
D)federal regulations.

Question 63

Unlike a sustainable competitive advantage, a cost competitive advantage:

A)does not ensure satisfactory profit margins.
B)requires business firms to reduce after-purchase service options.
C)involves producing goods that cannot be copied by competitors.
D)is subject to continual erosion.

Question 64

In the context of implementation of marketing objectives, which of the following statements is true?

A)Implementation gauges the extent to which marketing objectives have been achieved during the specified time period.
B)Brilliant marketing plans succeed even without proper implementation.
C)It involves a lot of communication for executing a plan.
D)Managers hold the power to decide and implement decisions rather than delegating it.

Question 65

Rues and West Bros., an ammunition manufacturer, defines its mission statement as being in the ammunition-production business rather than in the arms industry. In the given scenario, Rues and West Bros. is suffering from _____.

A)marketing inertia
B)marketing myopia
C)marketing dissonance
D)marketing blockage

Question 66

Which of the following statements is true of the price component of a marketing mix?

A)It does not affect a firm's competitive advantage.
B)It is the least important of the four Ps of the marketing mix.
C)It is what a buyer must give up in order to obtain a product.
D)It is decided independently of the external environment of the business.

Question 67

According to Ansoff's strategic opportunity matrix, which of the following factors is associated with market development?

A)Limiting production
B)Increasing the prices of products
C)Adding new uses to products
D)Limiting resources used for promotion

Question 68

In the context of a marketing mix, which of the following statements is true of a product?

A)The heart of a marketing mix is the product offering and product strategy.
B)A buyer must give up the need for a product in order to obtain its benefit.
C)A product includes all the business activities concerned with storing and transporting raw materials.
D)Products are often the most flexible in a marketing mix- the quickest elements to change.

Question 69

In the context of a marketing mix, promotion includes:

A)public relations activities.
B)pricing strategies.
C)after-purchase service.
D)storage and transportation of finished products.

Question 70

Varion Air, an airline company, is providing promotional offers to mark its first anniversary. Its customers will be given a complimentary air ticket on the purchase of three business class tickets. In this case, which of the following is true of its promotional strategy?

A)It will satisfy the flyers and not the management of Varion Air.
B)It may not be effective because promotion does not apply to services.
C)It may increase the sales of Varion Air.
D)It will work independently of the other three elements of the marketing mix.

Question 71

In the context of the general electric model, _____ refers to how well placed the organization is to take advantage of market opportunities.

A)business position
B)experience curves
C)market attractiveness
D)marketing myopia

Question 72

An effective marketing objective:

A)is qualitative rather than quantitative.
B)is compared to a benchmark.
C)is written independently of the mission statement.
D)is written after a marketing plan is drafted.

Question 73

According to Ansoff's strategic opportunity matrix, unlike market development, product development:

A)focuses on attracting present customers to existing products.
B)involves creating new products for present markets.
C)involves entering new markets as competitors.
D)focuses on using existing assets to provide added convenience to existing customers.

Question 74

Which of the following statements is true of strategic planning?

A)The goal of strategic planning is to create daily operational schedules for first-line workers.
B)Strategic planning does not require long-term commitments of resources.
C)A good strategic plan can help protect and grow a firm's resources.
D)Strategic planning does not cater to understanding customers and markets.

Question 75

_____ is a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization.

A)Marketing mix
B)Diversification
C)Core innovation
D)Marketing audit

Question 76

The marketers at Gemini Inc. have prepared a marketing plan for the company's air conditioners. The managers at Gemini have outlined several activities for their subordinates based on this marketing plan. The employees are required to finish these activities within a month. The managers have also allocated a budget for each activity. In the context of marketing planning, which of the following concepts is illustrated in the scenario?

A)Divestment
B)Implementation
C)Diversification
D)Vertical integration

Question 77

Which of the following statements is true of a niche strategy?

A)Only large companies can implement a niche strategy.
B)Companies that adopt a niche strategy have only a small number of customers.
C)Only the companies that do not have competitors can adopt a niche strategy.
D)Companies that adopt a niche strategy can only gain a price advantage over competitors.

Question 78

Which of the following statements is true of a marketing plan?

A)It is a set of orally communicated rules and is seldom written down.
B)It is developed independently of the external business environment.
C)It defines the business mission and objectives.
D)It lacks the elements of advanced strategic planning.

Question 79

Apcon Mobiles Inc. is a popular cell phone manufacturing company. To acquire new customers, it decides to launch its own SIM cards in highly competitive new markets. According to Ansoff's strategic opportunity matrix, which of the following is true of Apcon Mobiles Inc.?

A)Apcon Mobiles Inc.'s entry into new markets is likely to be risky.
B)Apcon Mobiles Inc.follows a product development strategy.
C)Apcon Mobiles Inc.'s follows a market penetration strategy.
D)Apcon Mobiles Inc.'s entry into new markets is likely to be successful.

Question 80

The basic goal of _____ is to increase short-term cash return without increased concern for long-run impact.

A)building
B)holding
C)harvesting
D)divesting