Question 1

Efficiency is commonly measured by such items as sales growth relative to competitors or changes in market share.

Accepted Answer

Efficiency is the ability to accomplish a task with minimum waste of time, effort or resources. Sales growth relative to competitors or changes in market share are measures of effectiveness or competitiveness rather than efficiency.

Question 2

Prospector businesses are expected to outperform defenders on both new product development and market-share growth.

Accepted Answer

Prospector businesses are more likely to focus on innovation and taking risks, which can lead to the development of new products and increased market share. Defenders, on the other hand, prioritize maintaining their current market position and may be less willing to take risks with new product development.

Question 3

In which type of generic business-level strategy does a company attempt to avoid direct,head-on competition with its major competitors and concentrate,instead,on narrowly defined market niches?

Accepted Answer

The focus strategy is a type of generic business-level strategy where a company avoids direct competition with major competitors and focuses on serving a narrowly defined market niche. This strategy allows the company to differentiate itself from competitors and create a strong brand identity within its niche market. The analyzer strategy focuses on balancing innovation and cost-effectiveness, while the cost-leader strategy aims to be the lowest cost producer in the market. The differentiation strategy focuses on creating a unique product or service that stands out from competitors.

Question 4

Some firms that are technological leaders in their industries defend individual product-market entries as they mature,in the face of increasing competition and eroding margins.

Accepted Answer

The answer of Some firms that are technological leaders in...

Question 5

The sharing of operating facilities and programs may be an inappropriate approach to gaining synergy for businesses following a prospector strategy.

Accepted Answer

Businesses following a prospector strategy are focused on innovation and growth through exploration of new markets and opportunities. Sharing operating facilities and programs may limit their ability to explore new avenues and innovate independently. Therefore, it may not be an appropriate approach to gaining synergy for these businesses.

Question 6

A defender strategy works best in industries where the basic technology is not very complex or where it is well developed and unlikely to change dramatically over the short term.

Accepted Answer

A defender strategy is more effective in industries where the technology is not very complex or where it is well-developed and stable. This allows companies to focus on improving operational efficiency and cost management rather than constantly adapting to technological changes.

Question 7

Automobile manufacturing is an appropriate example of an industry that uses analyzer strategy.

Accepted Answer

The automobile manufacturing industry is a highly competitive industry with constantly changing market trends and technologies. To cope with this, automobile manufacturers use an analyzer strategy that balances stability and flexibility. They maintain a core set of products and processes, but also keep an eye on emerging trends and technologies to adapt to changing customer needs and preferences. This allows them to stay competitive and profitable in a dynamic market.

Question 8

According to Porter,the three competitive positions that businesses pursue to gain and maintain competitive advantage in product-markets are:

Accepted Answer

Porter's three competitive positions are overall cost leadership, differentiation, and focus. Overall cost leadership strategy involves being the lowest-cost producer in the industry, differentiation strategy involves creating a unique and valuable product or service that sets the company apart from competitors, and focus strategy involves concentrating on a specific market segment or niche. These strategies help businesses gain and maintain a competitive advantage in their product-markets.

Question 9

Defenders rely more heavily on independent channel members such as manufacturer's representatives or wholesale distributors to distribute their products.

Accepted Answer

The answer of Defenders rely more heavily on independent channel...

Question 10

According to Porter,firms that do not follow a distinctive strategy:

Accepted Answer

According to Porter, firms that do not follow a distinctive strategy will perform poorly in the competitive market. This is because they will not have a unique value proposition and will struggle to differentiate themselves from other competitors. Therefore, the best choice is A.

Question 11

Temptation,a fast food joint,offers a limited selection of pizzas.In spite of its narrow range and lack of experimentation with new products,it has established a strong position in the market owing to its consistent product-market orientation and superior product quality and service.In the context of the Miles and Snow typology,which of the following business strategies has been employed by Temptation?

Accepted Answer

Temptation's focus on consistently delivering high-quality products and services and maintaining a strong position in the market without much experimentation aligns with the Defender strategy in the Miles and Snow typology. Defenders typically have a narrow product range and focus on maintaining their position in the market by improving their existing products and services. They also tend to avoid taking risks and are not very innovative.

Question 12

Miles and Snow classify business units into four strategic types.These are:

Accepted Answer

Miles and Snow classify business units into four strategic types: prospector, analyzer, defender, and reactor. These categories are based on a firm's willingness to innovate and take risks. Prospectors are innovative and entrepreneurial, while defenders seek to maintain a stable market position. Analyzers combine aspects of both prospectors and defenders, while reactors have no consistent strategy and instead react to changes in the environment. Therefore, choice D is the correct answer.

Question 13

A prospector strategy is particularly well suited to stable and static environments.

Accepted Answer

A prospector strategy involves taking risks and exploring new opportunities, which is better suited to dynamic and changing environments. In stable and static environments, a company may benefit more from a defender strategy, which focuses on maintaining its current market position.

Question 14

Differentiated defenders compete by offering more or better choices to customers than their competitors.

Accepted Answer

Differentiated defenders differentiate their product or service by offering unique features, benefits, or choices to customers, which makes them stand out from their competitors. Thus, they compete by offering more or better choices to customers than their competitors.

Question 15

A low-cost defender strategy is usually not so effective in fragmented markets desiring customized offerings as it is in commodity industries.

Accepted Answer

Fragmented markets with customized offerings require companies to invest in research and development, marketing campaigns, and customer service to differentiate their product or service. A low-cost defender strategy may not allow for such investments and may result in a loss of customers to competitors who offer more customized offerings. In commodity industries, however, where products are similar and price-sensitive, a low-cost defender strategy can be effective in attracting price-conscious customers.

Question 16

The generic business-level strategy which attempts to build customer perceptions of superior quality product,design or service is called:

Accepted Answer

A differentiation strategy aims to establish a unique position in the market by building customer perceptions of superior quality, design, or service. This strategy focuses on creating a product or service that is perceived as different and superior in some way, rather than competing on cost or narrow customer segments.

Question 17

Which of the following is the most essential strategic question to be asked by firms at the SBU level?

Accepted Answer

The most essential strategic question to be asked by firms at the SBU level is "How are we going to compete in this business?" This question focuses on the specific strategies that the SBU will employ to succeed in its market, and is critical to determining the SBU's future success. Options A and D are more relevant to overall corporate strategy, while option B is important but more focused on internal analysis.

Question 18

According to the Miles and Snow typology,the prospector strategic type:

Accepted Answer

The prospector strategic type is known for being the "first mover" in new-product market areas, which means they are likely to take risks and invest in innovative ideas to gain a competitive advantage in the market.

Question 19

Effectiveness is the success of a business's products and programs relative to those of its competitors in the market.

Accepted Answer

Effectiveness is indeed the success of a business's products and programs in comparison to those of its competitors in the market.

Question 20

Prospector and to a lesser degree,analyzer businesses devote a relatively small proportion of resources to the development of new product-markets.

Accepted Answer

Prospector businesses focus significantly on innovation and the development of new product-markets, often allocating a substantial portion of their resources to these activities. Analyzer businesses, while more cautious, also invest in new product-market development, though to a lesser extent than prospectors.

Quiz 9: Business Strategies: a Foundation for Marketing Program Decisions