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TEST BANKfor Strategic Market Management 9th Edition

David A. Aaker 

ESSAY QUESTIONS

1. What is the objective of external analysis? How would you distinguish between an effective and anineffective external analysis? What would you say would be the most useful way to conduct an externalanalysis? Why?

-Chapter 1 & 2-

OBJECTIVE QUESTIONS

Note – These objective uestions cover the material from the boo!. "n general# a false answer is mar!edlyat odds with material in the boo!. However# it may not be at odds with other written material. Therefore# it isim$ortant to $osition these uestions as a test of a student%s com$etence with the boo! material.

Chapter 1 – Strategic Market Maage!et" A O#er#ie$.

1.1&ive management tas!s used to develo$ strategic com$etencies do not include the following'

a. (trategic analysisb. )anage multi$le business unitsc. "dentify com$etitorsd. *evelo$ a sustainable advantagee. *evelo$ a growth $latform Answer: c. Identifying competitors is valuable but not one of the management tas!s.

1.+The boo! suggests that many mar!ets are dynamic and reuire new strategic models.

 Answer: "alse#the boo! asserts that all mar!ets are dynamic.

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To develo$ a sustainable com$etitive advantage ,(-/ in dynamic mar!ets# a com$any must createmulti$le business units.

 Answer: "alse. $here are two routes to creating %CAs' developing assets and competencies andcreating and leveraging organi(ational synergies between multiple business units.

1.0 business is generally an organiational unit that has a distinct business strategy and a manager withsales and $rofit res$onsibility.

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 Answer: $rue.

1.2(ynergy occurs when two businesses can reduce costs by sharing some asset such as a sales force orlogistics system.

 Answer: $rue.

1.3 strategy should only involve one value $ro$osition – otherwise chaos will occur.

 Answer: "alse. )ost successful strategies involve more than one * for e+ample' a customer value proposition that involves innovation and customer intimacy such as ,irgin Atlantic Airways.

1.4 strategic mar!et management system will have more value for an organiation that is not engaged incom$lex mar!ets with multi$le channels and regional variation in channels and $roducts.

 Answer: "alse. A strategic mar!et management system is designed to help a company comple+ or 

not to deal with the rapid changes that can occur in a firms e+ternal environment.

1.5The elements of strategy can be ca$sulated into four core elements66the $roduct6mar!et investmentdecision# functional area strategies# the customer value $ro$osition# and the sustainable com$etitiveadvantage.

 Answer: "alse the four elements are: 1 the product-mar!et investment strategy 2 the customervalue proposition' / assets and competencies and synergies' and 0 functional area strategies. %owhile a sustainable competitive advantage is the goal of a business strategy it is not one of theelements that ma!e up a good business strategy.

1.7 strategic com$etency is what a business unit does exce$tionally well# such a manufacturing# $romotion#distribution# etc. which has strategic im$ortance to the business.

 Answer: $rue. $his is the definition of a strategic competency. .

1.18ccording to the boo!# strategic mar!eting management has six objectives which include all exce$t one ofthe following',a/ 9reci$itate the consideration of strategic choices.,b/ -ontribute to the bottom line success of the firm.,c/ &orce a long6range view.,d/ )a!e visible the resource allocation decision.,e/ 9rovide methods to aid in strategic analysis and decision6ma!ing.

 Answer: . $here is nothing that will guarantee the success of a business. In fact' it is interesting todiscuss that a strategy is evaluated after implementation that is when it is !nown whether astrategy is successful or not. .

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The four elements of a business strategy for a firm are the $roduct6mar!et investment decision# thefunctional strategies and $rogram# the customer value $ro$osition# and the :::::::::: and :::::::::.

 Answer: assets and competencies. .

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The sco$e of a business is defined by the $roducts it offers and chooses not to offer# by the mar!ets it doesand does not see! to serve# by the com$etitors it chooses to com$ete with or to avoid# and by its level ofvertical integration.

 Answer: $rue. $his is the definition of a business scope.

1.1;(trategic mar!eting is involved in ma!ing decisions# some of which include investment decisions.