ITPEC FE Morning October 2019 Question 69
According to the “competitive strategy” proposed by Philip Kotler, which of the following describes a company that has no high market share, but has the strategic aim to increase income and acquire a unique position by focusing management resources on particular products and services?
Explanation
Market nicher — a firm without a high share that concentrates its resources on particular products and services to hold a unique position.
Kotler classifies firms by their competitive position in a market:
- •Leader: the top share; expands total demand and defends its position across the whole market
- •Challenger: a large firm, not yet on top, that attacks the leader to gain share, often by differentiation
- •Follower: imitates the leader and aims at stable profit without risky challenges
- •Nicher: a small share, but specialises in a narrow segment where it can be unique and profitable
Answer (d)
Why not others:
- •(a) — a market challenger aims to raise its share by attacking the leader across the market, not by narrowing its focus
- •(b) — a market follower copies the leader's products and strategy, which is the opposite of seeking a unique position
- •(c) — a market leader has the highest share, which contradicts "no high market share"
Key rule: Leader defends the whole market, challenger attacks the leader, follower imitates, nicher specialises in a segment.
Business Strategy Management · AI-written, may contain errors
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