ITPEC FE Morning April 2022 Question 66
Companies are classified on the basis of their competitive position in the market. There are typically four types: leader, challenger, follower, and nicher. Which of the following is the most appropriate characteristic of a leader’s strategy?
Explanation
Increasing total demand with new products and new ways to use them while keeping or growing share — the leader strategy.
Kotler's four competitive positions each call for a different strategy:
The leader holds the largest share, so it gains most when the whole market grows; that is why it creates new demand and new uses.
Answer (d)
Why not others:
- •(a) — differentiating on every element of the marketing mix and attacking the rival's weaknesses or coverage gaps is the challenger strategy
- •(b) — capturing a market the high-ranking companies do not target and concentrating resources there is the nicher strategy
- •(c) — putting stable profit ahead of share and doing what the leader does is the follower strategy
Key rule: Leader grows the whole market, challenger attacks through differentiation, follower imitates for stable profit, nicher dominates a narrow segment.
Business Strategy Management · AI-written, may contain errors
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