ITPEC FE Subject A April 2024 Question 49

Topic: Business Strategy Management

Which of the following is a strategy that concentrates resources in the segment of a specific customer or specific product in order to achieve specialization?

a)Challenger strategyb)Follower strategyc)Leader strategyd)Niche strategy

Explanation

Niche strategy — the firm concentrates its resources on a narrow segment of customers or products and specializes in it.

Kotler's competitive positions and their strategies:

Position	Strategy
Leader	Largest share; expands the whole market and defends its share
Challenger	Second tier; attacks the leader to win share
Follower	Imitates the leader efficiently and avoids costly confrontation
Nicher	Specializes in a segment the large firms do not serve well

Answer (d)

Why not others:

•(a) Challenger strategy — goes after the leader's share with differentiation in the broad market, not in a narrow segment
•(b) Follower strategy — copies the leader's successful products at low cost instead of specializing
•(c) Leader strategy — covers the whole market with a full line to keep the top share

Key rule: Specializing in one segment defines the niche position; leader, challenger and follower all compete in the mass market and differ in how they treat the leader.

Business Strategy Management · AI-written, may contain errors

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