Chapter 03 – Business Strategies and Their Marketing Implications
End of Chapter Discussion Questions and Answers
1. Compare and contrast the prospector and low-cost defender business strategies
discussed in this chapter on each of the following strategic dimensions:
a. Scope.
b. Objectives.
c. Deployment of resources.
d. Sources of synergy.
Answer:
Student answers may vary. Answers should include elements such as:
Prospector:
Operates within a broad product-market domain that undergoes periodic redefinition
Defender:
Attempts to locate and maintain a secure position in relatively stable product or service
areas
2. The 3M Company’s Industrial Tape SBU pursues a differentiated defender strategy in
an industry where both the basic technologies and the customer segments are relatively
mature and stable. Is the objective imposed by top management of obtaining 30
percent of sales from products introduced within the last four years an appropriate
objective for such a SBU? What do you think top management hopes to accomplish by
imposing such an objective on the Industrial Tape SBU? What are the potential
disadvantages or dangers involved in imposing such an objective?
Answer:
Student answers may vary. Answers should include elements such as:
3-1
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 03 – Business Strategies and Their Marketing Implications
3. If you were the general manager of the 3M Industrial Tape SBU discussed in question
2, which objectives would you argue are most appropriate for your business unit in
view of its strategy and its external environment? Why?
Answer:
Student answers may vary. Answers should include elements such as:
4. You are the marketing manager for a generic products division of a major
pharmaceutical manufacturer. Your division uses the corporation’s excess
manufacturing capacity to produce generic prescription drugs—drugs whose patents
have expired and can thus be manufactured by any company that wishes to produce
them. Your division is a low-cost defender that maintains its position in the generic
drug market by holding down its costs and selling generic products to distributors and
pharmacies at very low prices. What are the implications of this business strategy for
each of the 4 Ps in the strategic marketing program you would develop for your
division?
Answer:
Student answers may vary. Answers should include elements such as:
3-2
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 03 – Business Strategies and Their Marketing Implications
As a low-cost defender, basically the job of research, product development, and initial
promotion have already been done by the original product developers. Consequently:
Product policies:
Narrow product-line breadth relative to competitors
Price policies:
Distribution policies:
Promotion policies:
3-3
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.