ITPEC FE Morning April 2018 Question 70

Which of the following is the basic strategy of a niche in a competitive position?

a)A differentiation strategy necessary for a leader attack, such as a share pursuitb)An imitation strategy that quickly responds to market opportunitiesc)An omni-directional strategy that covers the entire market and secures the highest shared)A specialization strategy that aims at the specialization of the product and market

Explanation

A specialization strategy focused on particular products and markets — the basic strategy of a nicher.

Kotler classifies firms by their competitive position in a market, and each position has its own basic strategy:

•Leader: the top share; covers the whole market in every direction and defends its position
•Challenger: attacks the leader to gain share, usually by differentiation
•Follower: imitates the leader and responds quickly to opportunities, avoiding costly confrontation
•Nicher: a small share, but specializes in a narrow product and market segment that larger firms do not serve well

Answer (d)

Why not others:

•(a) — differentiation to attack the leader and pursue share is the challenger's strategy
•(b) — imitation with quick response to market opportunities is the follower's strategy
•(c) — covering the entire market in every direction and holding the top share is the leader's strategy

Key rule: Leader defends the whole market, challenger attacks the leader, follower imitates, nicher specializes in a segment.

Business Strategy Management · AI-written, may contain errors

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