ITPEC FE Morning October 2020 Question 66
According to the “competitive strategy” proposed by Philip Kotler, which of the following describes a company that has no high market share but utilizes quantitatively large management resources?
Explanation
Market challenger — a firm with large management resources that has not reached the top market share.
Kotler classifies competitors by the quantity and the quality of their management resources (people, goods, money, information):
The challenger is usually the second or third firm. It has the size to compete across the market, so its strategy is to attack the leader and differentiate to win share.
Answer (a)
Why not others:
- •(b) Market follower — few resources of ordinary quality; it imitates the leader and avoids direct competition
- •(c) Market leader — holds the highest market share, which the question rules out
- •(d) Market nicher — few but distinctive resources, concentrated on a narrow segment the large firms do not serve
Key rule: Kotler's four positions come from two questions, how much and how distinctive the resources are: large and distinctive is the leader, large only is the challenger, distinctive only is the nicher, neither is the follower.
Business Strategy Management · AI-written, may contain errors
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