Question 1

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

Accepted Answer

As a business approaches 100 percent of its share development index, it means that the company has captured almost the entire market share available, leaving very little room for further growth. At this point, gaining additional growth based on market share gains becomes increasingly difficult. Therefore, this statement is 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.

Accepted Answer

Defensive strategic market plans are usually implemented as a response to external threats or challenges, and focus on maintaining or protecting a company's current market position rather than growth. They are more appropriate for the maturity or decline stages of a product-market life cycle, when market saturation and increased competition can pose a threat to a company's market share.

Question 3

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

Accepted Answer

A low level of market attractiveness typically requires a defensive strategic market plan, as the market may be saturated or declining. Offensive strategies are typically used in high potential markets with opportunities for growth.

Question 4

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

Accepted Answer

Unrelated new market entry strategy allows a company to diversify its portfolio and reduce its dependence on a single market, thus enhancing its long-term sustainability.

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

Accepted Answer

Defensive strategies are usually implemented in the latter stages of a product-market life cycle to protect important share positions and contribute to short-run sales revenues and profits. Defensive strategies include lowering prices, increasing advertising and promotion, adding product features or quality, improving channels of distribution, increasing service or warranties, and strengthening brand image. Disintermediation strategies aim to eliminate intermediaries in the distribution channel, offensive strategies aim to gain market share from competitors, centralization strategies aim to streamline operations and decision-making, while decentralization strategies aim to empower local managers and employees.

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.

Accepted Answer

Retaining customers and improving their loyalty can lead to repeat business and positive word-of-mouth, ultimately increasing profits and enhancing long-term performance. It is an offensive strategic investment for any business.

Question 7

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

Accepted Answer

High-technology markets are characterized by rapid changes in demand and short product and market life cycles due to the continuous development and introduction of new technologies.

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

Accepted Answer

Offensive strategies are usually growth-oriented and are more likely to occur in the growth stage of a product-market life cycle. These strategies focus on expanding market share through aggressive marketing, pricing, and distribution tactics.

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

Accepted Answer

Market attractiveness measures the potential demand and growth of a product-market, while competitive advantage measures a company's ability to outperform competitors in that market. By combining these two factors, a company can determine the potential success and profitability of entering or staying in a particular product-market.

Question 10

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

Accepted Answer

The combination of market attractiveness and competitive advantage is commonly used in product portfolio analysis and helps in determining the position of a product-market in terms of growth potential and competitive strength.

Question 11

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

Accepted Answer

The share development index (SDI) is a measure of brand development relative to its potential market. It is calculated by dividing the brand's current sales by the sales of all brands in the market, and then multiplying by 100. An SDI of 35 would mean that the brand currently has 35% of the market's potential sales, not that it has reached its maximum market share. The maximum market share a business can attain depends on a variety of factors such as the level of competition, market saturation, and customer preferences.

Question 12

Entry into emerging markets requires significant investment to develop demand.

Accepted Answer

Emerging markets are often characterized by low levels of economic development and lack of awareness of new brands or products. Significant investment is needed to develop demand for a company's offerings in these markets through marketing, education, and building relationships with local suppliers and distributors.

Question 13

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

Accepted Answer

Developing untapped new-market potential can involve high risk due to uncertainties about the demand, competition and regulatory environment. However, if successful, it can offer high returns through capturing a new customer base and expanding the business.

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

Accepted Answer

A defensive strategy is most appropriate for businesses operating in a market that has very low market attractiveness score. This strategy involves focusing on retaining existing customers rather than attracting new ones, reducing costs, and protecting market share.

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.

Accepted Answer

An offensive strategic market plan is used for entering a new market with no established share position. It involves investing resources in market research, product development, and marketing to gain a foothold in the market and increase market share.

Question 16

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

Accepted Answer

During the rapid-growth phase, as the market expands, customer needs become more apparent and varied, leading to the formation of market segments.

Question 17

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

Accepted Answer

Offensive strategic market plans are designed to help a company achieve sales growth, increase market share, and improve overall profit performance.

Question 18

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

Accepted Answer

These are indeed the core offensive strategies for businesses. "Invest to grow" involves allocating resources towards expanding the business, "improve position" involves enhancing the company's competitive advantage, and "new market entry" involves entering new markets or industries.

Question 19

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

Accepted Answer

An MDI score of 62 indicates that there is considerable untapped potential in the market, meaning there are many potential customers who have not yet entered it for various reasons such as lack of awareness or accessibility. Therefore, option A is true.

Question 20

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

Accepted Answer

The Share Development Index (SDI) is the ratio of category sales to brand sales.

Quiz 12: Offensive Strategies