Deck 2: Marketing Strategy

Question 1

The mission statement for an organization sets the broad direction for an organization.

Answer 1

True

Question 2

A foundation for resource and financial-based planning is developed through a SWOT analysis.

Answer 2

False

Question 3

The cost-based differential advantage is the hardest differential advantage to regain once it is lost.

Answer 3

False

Question 4

Trust is an essential differential advantage in the customer believing the price is fair.

Question 5

Invisible value is the value that is built into a product or service.

Question 6

Sustaining innovations are those that might be viewed as incrementally new products or services.

Question 7

The three attributes that are common to distributive innovations are that they tend to be cheaper, easy to get, and somewhat more expensive than existing alternatives.

Question 8

Large, established firms with the financial resources to innovate are the organizations that typically bring disruptive innovations to the market.

Question 9

When Intel places a sticker on computers showing that their chip is inside, they are demonstrating their visible value.

Question 10

Evidence management is an organized approach to presenting capabilities.

Question 11

Increasing sales of present products to present markets is a product development strategy.

Question 12

Taking new products to new markets is a diversification strategy.

Question 13

Taking existing products to new markets is a market penetrations strategy.

Question 14

John Hopkins is working with a private hospital in China to establish a new cancer center. This approach is an example of the market penetration strategy.

Question 15

A market penetration strategy can occur through a more aggressive pricing strategy or distribution strategy than a competitor.

Question 16

Many women's hospitals are now establishing specialized services for men as a market penetration strategy.

Question 17

A medical group deciding to build a hospital is an example of backwards vertical integration.

Question 18

A health system has decided to create its own accountable care organization and be responsible for the health status of a group of patients. This is an example of a product development strategy.

Question 19

In the pharmaceutical industry, one company often licenses its products to another so that the second firm can market the drug. This is referred to as a strategic affiliation.

Question 20

Reducing the number of services in the service line is referred to as divestment.

Question 21

A multispecialty group has many satellite locations. As the market changes in population distribution, the group decides to close some clinic locations. This strategy is referred to as retrenchment.

Question 22

Harvesting is allowing a product to gradually decline by withdrawing support until there is little or no market demand.

Question 23

In the BCG matrix, the underlying assumption is that cash flow and rate of return are closely related to sales volume.

Question 24

When growth is low but present value is high, the product is a cash cow.

Question 25

Problem children have great growth potential but low market share.

Question 26

Revenues generated by stars should go to the cash cows.

Question 27

Revenue that the cash cows generate should go to the problem children.

Question 28

A key factor in the Five Forces Model is the threat of new technology.

Question 29

When the cost of switching among providers is low, competition can be intense.

Question 30

In health care, nurse practitioners and pharmacists represent the threat of new entrants.

Question 31

The Five Forces Model and the Blue Ocean strategy perspective both consider strategy in light of existing competitors.

Question 32

Red Oceans represent the blood of companies fighting for market share among existing competitors.

Question 33

In terms of the Blue Ocean perspective, new service innovations differ on two dimensions of the types of benefits offered and the price level.

Question 34

A market concentration strategy focuses on the most geographically concentrated group of customers.

Question 35

Hospital ROI has been found to be related to market share.

Question 36

Specialty hospitals could be said to follow a concentrated strategy.

Question 37

Johns Hopkins, a major academic healthcare organization located in Baltimore, Maryland, has multiple satellite clinics throughout the wider Washington D.C. metropolitan area. This strategy is a:

A) diversification strategy.
B) product-development strategy.
C) market-penetration strategy.
D) market-development strategy.

Question 38

Many women's hospitals are now offering specialized programs for men. This approach is an example of what type of strategy?

A) Diversification
B) Product development
C) Market development
D) Market penetration

Question 39

Scott & White Clinic in Texas and Aultman Hospital in Ohio have developed their own insurance products. These organizations have decided to pursue a strategy of:

A) market development.
B) diversification.
C) product development.
D) market penetration.

Question 40

Sharp Health Care has partnered with the CVS retail pharmacy chain to offer its services within CVS retail locations. This is an example of:

A) forward integration.
B) mass retailing.
C) mass distribution.
D) backward integration.

Question 41

In a backward integration strategy, an organization becomes:

A) a pharmaceutical company.
B) its own supplier.
C) its own buying entity.
D) a purchasing coalition.

Question 42

When growth in existing markets is slow or regulatory changes make it risky to remain in existing markets, organizations tend to pursue which of the following growth strategies?

A) Diversification
B) Product development
C) Market penetration
D) None of these is correct.

Question 43

IBM has increasingly partnered with healthcare organizations interested in applying the Watson cloud technology for healthcare applications to assist physicians and researchers. For IBM, this approach is an example of which type of growth strategy?

A) Market penetration
B) Market development
C) Product development
D) Diversification

Question 44

Strategic alliances in which both corporate entities hold an equity position are:

A) usually successful given the fact that there is shared risk.
B) difficult to achieve, because it is difficult to get corporate agreement among both parties.
C) referred to as shared risk pooled entities.
D) defined as joint venture businesses.

Question 45

When there is a weak fit between a core business and a particular business line, organizations will typically follow what particular strategy?

A) They will consolidate the weak line into others.
B) The organization will attempt to divest the weak line.
C) The organization will try to refine the target marketing strategy.
D) They will attempt to try to reinvigorate the line with additional advertising.

Question 46

Increasingly, many hospitals are having to close service lines when the market is too small or costly to serve, such as the case in mental health. This is an example of which type of strategy?

A) Divestment
B) Pruning
C) Retrenchment
D) Harvesting

Question 47

A pharmaceutical vice president has decided to gradually withdraw marketing and promotional support from a particular drug. She has instructed her sales force to no longer spend any time with physicians discussing this particular script, nor will any promotional support be provided. The number of generics competing against this formulary has increased, and the margins have declined precipitously. This is an example of:

A) retrenchment.
B) harvesting.
C) pruning.
D) divestment.

Question 48

In the BCG matrix, a marketing person can affect one of the two dimensions of this matrix as a function of their strategy. Which dimension could they possibly affect?

A) Population
B) Target size
C) Market growth rate
D) Market share

Question 49

In the BCG matrix, revenues generated by stars should be reinvested into:

A) dogs.
B) cows.
C) stars.
D) problem children.

Question 50

A product would be considered a cash cow if:

A) the product's market has matured, but the organization was able to retain its market share through the life cycle.
B) the product has a high market share and a high growth rate
C) the organization could generate cash but not capture share.
D) product has low relative market share, but high growth rate.

Question 51

Which of the following is true of a service that is a problem child?

A) It is a new service with little share or one that is generating a lot of cash.
B) It is a poor service but has a high share.
C) It is a new service but has quality problems.
D) It is a new service or one that has been in existence for some time, but there are strategy problems.

Question 52

Which of the following is not one of the four factors that affect the intensity of competition in Porter's Five Forces Model?

A) Intensity of competition
B) Bargaining power of buyers
C) Bargaining power of suppliers
D) Threat of new entrants

Question 53

In terms of Porter's Five Forces Model, the formation of physician/hospital networks is an attempt to:

A) develop a structure to create new medical technologies quickly.
B) mitigate the power of buyers with stronger suppliers.
C) mitigate the threat of new entrants.
D) All of these are correct.

Question 54

The foundation of the 7-S framework is:

A) the seven structural components of efficiency.
B) shared values.
C) shared service lines across merged systems.
D) system efficiencies.

Question 55

Suppliers can become a significant threat when they are able to:

A) forward integrate.
B) develop a system for technological interactivity.
C) systematize delivery online.
D) backward integrate.

Question 56

On a continuum of strategic perspectives, the Blue Ocean strategy is most dissimilar to:

A) the BCG matrix, because growth is not a major focus of this model.
B) the BCG matrix, because market share and growth are irrelevant in considering opportunities.
C) the Porter model, because Porter focuses on existing competitors, whereas Blue Ocean focuses on uncontested market space.
D) the Porter model, because Blue Ocean only has blue and red oceans, not five forces.

Question 57

Mass marketing is when an organization decides to treat the entire market as a:

A) group of people with very different needs.
B) heterogeneous group of patients.
C) group of patients who want to purchase the same services.
D) None of these is correct.

Question 58

Boutique medical practices in which patients pay a significant amount upfront to ensure that they have personalized concierge service with their doctor is an example of a:

A) mass marketing strategy.
B) high-income strategy.
C) market concentration strategy.
D) market elite strategy.

Question 59

In health care, it has been found that hospitals with higher profitability tend to be those with:

A) lower market share in niche markets.
B) higher market share.
C) more technological investments.
D) medical staff encompassing a wider age distribution.