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

Accepted Answer

A business pursuing a prospector strategy focuses on growth through the development of new products and markets. This strategy involves taking risks and being innovative in order to find new opportunities for the business to expand. Therefore, option B is the best choice.

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

Accepted Answer

Strategic business units (SBUs) are individual units within a larger company that operate as separate businesses with their own mission, objectives, and strategies. They are commonly used by companies engaged in multiple industries or businesses, allowing for a more focused approach to managing each individual unit. SBUs may also have different growth objectives and competitive strategies than each other, depending on their place within the overall company structure. They are not necessarily alliances with other competitive firms aimed at new markets, nor do they always focus solely on competing within their industry.

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

Accepted Answer

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

Accepted Answer

Differentiated defenders focus on providing unique features and high service quality to maintain a competitive advantage in established markets. This strategy sets them apart from low-cost defenders and allows them to charge premium prices. Prospectors and analysers focus on new product development and market research, respectively, and may not prioritize service quality as heavily as differentiated defenders.

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

Accepted Answer

Prospectors typically operate in broad and rapidly changing domains, where they seek out new opportunities and are willing to take risks to establish themselves in new markets. Neither the technology nor the customer segments may be well established, as they are often pioneering new products or services.

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

Accepted Answer

The defender strategy is most useful for business units with a profitable share of one or more major segments in a relatively mature and stable industry. This strategy focuses on maintaining the current position by defending against any competition, increasing efficiency in operations, and staying focused on the core business. It is especially useful in stable industries where the competition is not intense and the demand for products is predictable.

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

Accepted Answer

Businesses following a reactor strategy are not as willing to take risks in new product or market development. They typically don't have a clear direction and react to changes in the market instead of proactively planning strategic moves.

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

Accepted Answer

This characteristic refers to the firm's ability to differentiate its SBUs in terms of the unique product markets they serve. By ensuring that no two SBUs compete for the same customers with similar products, the firm can effectively allocate resources and focus on serving distinct markets with their own set of customer needs and preferences. This helps to avoid cannibalization and maximize overall 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.

Accepted Answer

The answer of Identify the correct statement concerning the distribution...

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

Accepted Answer

The answer of Which of the following is not a...

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.

Accepted Answer

Differentiated defenders are focused on maintaining a high level of control over their distribution channels in order to ensure consistent delivery of their differentiated product or service. This is best achieved through high forward vertical integration, where the firm owns and controls the channels of distribution. Diversified prospectors and customer-oriented analysers may also use some level of vertical integration in their distribution strategies, but it is less likely to be as high as with differentiated defenders. Therefore, choices B, C, and D are not the best choices for this question.

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

Accepted Answer

Emerson Electric is trying to gain operational synergies by forming an operating group of autonomous business units that share resources, which will result in reduced costs of production and marketing per unit.

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

Accepted Answer

The strategy described is the analyser strategy, which balances maintaining a strong position in the current market while also pursuing opportunities in new, related markets. This strategy involves a mix of exploration and stability, and is often used by businesses that have a strong core product but recognize the need to diversify in order to maintain long-term success.

Question 14

When the Pillsbury Company rejected the proposal of their employee James 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):
A)prospector strategy
B)reactor strategy
C)analyser strategy
D)diversification strategy

Accepted Answer

The Pillsbury Company's approach of focusing on incremental line extensions and product improvements, rather than pursuing the innovative idea of microwavable packaged food, aligns with an analyzer strategy. Analyzers typically maintain their current markets and customer bases by improving and extending their existing product lines, while being less inclined to venture into new, untested markets.

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

Accepted Answer

The answer of 42BELOW-a wheat vodka made by a small...

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

Accepted Answer

The prospector strategy is best suited for industries in the early growth stage, as these industries have a high level of uncertainty and require experimentation and innovation to succeed. Prospector organizations thrive in dynamic and rapidly changing markets, where they can take risks and explore new opportunities. As the industry matures, the level of uncertainty decreases, and it becomes more difficult for prospectors to maintain their competitive advantage. Therefore, options B, C, and D are not conducive to the prospector strategy.

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.

Accepted Answer

Services, by their nature as intangibles, cannot typically be tested or experienced before purchase. This contrasts with tangible goods, which can often be sampled, tried, or inspected prior to buying.

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

Accepted Answer

The answer of Which of the following best describes the...

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.

Accepted Answer

The strategy employed here is breaking down the corporate objective into subobjectives for each strategic business unit (SBU). The 3M consumer product group has set a specific objective for the Never Rust soap pads, and is making a major investment in a new plant and advertising budget to capture a major share of the soap pad market. At the same time, the group is maintaining profitability goals for its other established products, which suggests that each SBU has its own set of objectives and targets that align with the overall corporate objectives.

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

Accepted Answer

The strategy being described is the focus strategy, which involves concentrating on a specific market niche to gain a competitive advantage. This is different from overall cost leadership, which aims to reduce costs to offer lower prices than competitors, and differentiation, which aims to offer unique features or benefits to stand out from competitors in the broader market. Segmenting refers to dividing the market based on different demographics or characteristics, which may be part of a focus strategy but is not the primary focus of the strategy being described.

Quiz 3: Business Strategies and Their Marketing Implications

A business pursuing a prospector strategy:

Strategic business units:

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

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

The defender strategy is most useful:

Businesses following a reactor strategy:

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?

Identify the correct statement concerning the distribution policies.

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

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

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?

When the Pillsbury Company rejected the proposal of their employee James 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) :

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.

Which environmental factor is conducive to the prospector strategy?

Which of the following observations is not true of services?

Which of the following best describes the effectiveness performance dimension?

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.