3.8.1 Strategic direction: choosing which markets to compete in and what products to offer

• Order the steps involved in choosing a strategic direction:

  1️⃣ Decide which markets to compete in

  2️⃣ Determine what products to offer
• Market analysis involves studying the size, growth, trends, and characteristics of the market
• Strategic direction involves only deciding which markets to compete in.

  False
• Match the research type with its informatiion goal:

  Market Analysis ↔️ Informs strategic decisions

  Competitor Research ↔️ Informs competitive positioning
• Match the factor with its description when identifying target markets:

  Market Segmentation ↔️ Dividing the market into distinct groups

  Market Attractiveness ↔️ Evaluating profitability and growth potential

  Competitive Advantage ↔️ Assessing unique strengths to outperform competitors
• Match the product type with its strategic suitability:

  Existing Products ↔️ Market Penetration or Market Development

  New Products ↔️ Product Development or Diversification
• What are the two key decisions involved in defining strategic direction?

  Markets and products
• Match the strategic direction with its description:

  Market Penetration ↔️ Existing products in existing markets

  Market Development ↔️ New geographic markets with existing products

  Product Development ↔️ New products for existing markets

  Diversification ↔️ New markets with new products
• Market analysis focuses on specific competitors, while competitor research focuses on the overall market.

  False
• Market segmentation divides the overall market into distinct groups of customers
• Match the product option with its market suitability:

  Existing Products ↔️ Market Penetration or Market Development

  New Products ↔️ Product Development or Diversification
• The focus competitive strategy involves targeting a narrow market segment through either cost leadership or differentiation.


  True
• Choosing a strategic direction involves deciding which markets to compete in and what products to offer
• Match the strategic direction with its description:

  Market Penetration ↔️ Focusing on existing products in existing markets

  Market Development ↔️ Expanding into new geographic markets with existing products

  Product Development ↔️ Developing new products for existing markets

  Diversification ↔️ Entering new markets with new products
• Match the research type with its focus:

  Market Analysis ↔️ Overall market

  Competitor Research ↔️ Specific competitors
• Competitor research identifies only competitive advantages, not disadvantages.

  False
• Market segmentation divides the overall market into groups with similar needs and behaviors.


  True
• New products are primarily suited for diversification strategies.


  True
• New products are suited for market development strategies.


  True
• Market development involves expanding into new geographic markets with new products.

  False
• Competitor research analyzes the strengths, weaknesses, strategies, and market positions of the business's competitors
• Match the purpose with the research type:

  Market Analysis ↔️ Informs strategic decisions

  Competitor Research ↔️ Informs competitive positioning
• What can a business align its strategic direction with after identifying promising target markets?

  Market analysis
• Differentiation allows a business to command premium prices.
• The choice of strategic direction has no impact on a business's competitive positioning.

  False
• Competitor research involves analyzing the strengths, weaknesses, strategies, and market positions of the business's competitors
• Market analysis helps a business understand the opportunities and threats
• Identifying target markets involves selecting the specific groups of customers the business will focus on serving
• Existing products are suited for market penetration or market development
• Existing products are suited for market penetration
• Market penetration involves focusing on existing products in existing markets
• What does market analysis help a business understand?

  Opportunities and threats
• Order the focus of market analysis and competitor research:

  1️⃣ Market Analysis: Examines market size, growth, and trends

  2️⃣ Competitor Research: Examines competitor capabilities and strategies

  3️⃣ Market Analysis: Identifies market opportunities and threats

  4️⃣ Competitor Research: Identifies competitive advantages and disadvantages
• Competitive advantage is assessed when evaluating market attractiveness.


  True
• What is the primary focus of the cost leadership competitive strategy?

  Lowest-cost producer