Retailing Management 10Th Edition By Michael Levy - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below Retailing Management, 10e (Levy) Chapter 5 Retail Market Strategy 1) A retail format describes the nature of the retailer's operations that it will use to satisfy the …
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Retailing Management 10Th Edition By Michael Levy – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
Retailing Management, 10e (Levy)
Chapter 5 Retail Market Strategy
1) A retail format describes the nature of the retailer’s operations that it will use to satisfy the needs of its target market.
Answer: TRUE
Explanation: A retail format describes the nature of the retailer’s operations—its retail mix (type of merchandise and services offered, pricing policy, advertising and promotion programs, store design and visual merchandising, typical locations, and customer services)—that it will use to satisfy the needs of its target market.
Difficulty: 1 Easy
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) After selecting a target market and a retail mix, the final element in a retail strategy is the identification of prospective wholesalers.
Answer: FALSE
Explanation: After selecting a target market and a retail mix, the final element in a retail strategy is the retailer’s approach to building a sustainable competitive advantage.
Difficulty: 1 Easy
Topic: What is a Retail Strategy?
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Building strong relationships with wholesalers is one of the three approaches for developing a sustainable competitive advantage.
Answer: FALSE
Explanation: Three approaches for developing a sustainable competitive advantage are (1) building strong relationships with customers, (2) building strong relationships with suppliers, and (3) achieving efficient internal operations.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
4) Customer relationship management programs collect data about customer shopping behavior to enable retailers to build and maintain customer loyalty.
Answer: TRUE
Explanation: Customer relationship management programs collect data about customer shopping behavior to enable retailers to build and maintain customer loyalty.
Difficulty: 1 Easy
Topic: Customer Relationship Management Process
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) Market expansion approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.
Answer: FALSE
Explanation: Market penetration approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) A retail format development growth opportunity is an opportunity in which a retailer develops a new retail format for the same target market.
Answer: TRUE
Explanation: A retail format development growth opportunity is an opportunity in which a retailer develops a new retail format—a format with a different retail mix—for the same target market.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Horizontal integration describes diversification by retailers into wholesaling or manufacturing.
Answer: FALSE
Explanation: Vertical integration describes diversification by retailers into wholesaling or manufacturing.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
8) Direct investment occurs when a retail firm invests in and owns a retail operation in its home country.
Answer: FALSE
Explanation: Direct investment occurs when a retail firm invests in and owns a retail operation in a foreign country.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
9) The first step in the strategic retail planning process is to define the business mission.
Answer: TRUE
Explanation: The first step in the strategic retail planning process is to define the business mission.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) Scale economies are cost advantages due to a retailer’s size.
Answer: TRUE
Explanation: Scale economies are cost advantages due to a retailer’s size.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
11) A retail strategy is a statement that identifies all the following except
Answer: C
Explanation: A retail strategy is a statement identifying (1) the retailer’s target market, (2) the format and resources the retailer plans to use to satisfy the target market’s needs, and (3) the bases on which the retailer plans to build a sustainable competitive advantage.
Difficulty: 1 Easy
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
12) The ________ is the market segment(s) toward which the retailer plans to focus its resources and retail mix.
Answer: A
Explanation: The target market is the market segment(s) toward which the retailer plans to focus its resources and retail mix.
Difficulty: 2 Medium
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
13) A cafe focuses primarily on customers who are aged between 18 and 35 and earning about $20,000 to $40,000 annually. This segmentation of customers is known as its
Answer: B
Explanation: The target market is the market segment(s) toward which the retailer plans to focus its resources and retail mix.
Difficulty: 2 Medium
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
14) Hot Topic LLC appeals to tweens and teens through their Gothic frocks, fad movie gear, piercing paraphernalia, and popular T-shirts and posters. The staff at Hot Topic wears the merchandise. Also, they are active in helping their young customers choose from the hip merchandise. The teens and tweens can be considered the
Answer: A
Explanation: The target market is the market segment towards(s) which the retailer plans to focus its resources and retail mix.
Difficulty: 2 Medium
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
15) A(n) ________ describes the nature of the retailer’s operations that it will use to satisfy the needs of its target market.
Answer: E
Explanation: A retail format describes the nature of the retailer’s operations that it will use to satisfy the needs of its target market.
Difficulty: 3 Hard
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
16) Which of the following is a component of retail mix?
Answer: D
Explanation: The retail mix consists of the type of merchandise and services offered, pricing policy, advertising and promotion programs, store design and visual merchandising, typical locations, and customer services.
Difficulty: 1 Easy
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
17) Store design is a component of the
Answer: E
Explanation: The retail mix consists of the type of merchandise and services offered, pricing policy, advertising and promotion programs, store design and visual merchandising, typical locations, and customer services.
Difficulty: 2 Medium
Topic: What is a Retail Strategy?
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
18) Which of the following statements is true of a sustainable competitive advantage?
Answer: A
Explanation: A sustainable competitive advantage is an advantage the retailer maintains over its competition that is not easily copied by competitors and thus can last over a long period of time.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
19) A toy store has acquired an edge over its competition that cannot be easily copied by its competitors. Which of the following has the store achieved?
Answer: B
Explanation: A sustainable competitive advantage is an advantage the retailer maintains over its competition that is not easily copied by competitors and thus can last over a long period of time.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-01 Define retail strategy.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
20) A ________ is a group of consumers with similar needs and a group of retailers that satisfy those needs using a similar retail channels and format.
Answer: A
Explanation: A retail market segment is a group of consumers with similar needs and a group of retailers that satisfy those needs using similar retail channels and format.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
21) After selecting a target market and a retail mix, the final element in a retail strategy is the retailer’s approach to
Answer: A
Explanation: After selecting a target market and a retail mix, the final element in a retail strategy is the retailer’s approach to building a sustainable competitive advantage.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
22) Why should a retailer be concerned with building a sustainable competitive advantage?
Answer: E
Explanation: Establishing a sustainable competitive advantage means that the retailer, in effect, builds a wall around its battle position—that is, around its present and potential customers and its competition. When the wall is high, it will be hard for external competitors (i.e., retailers operating in other markets or entrepreneurs) to scale the wall and enter the market to compete for the retailer’s target customers.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
23) Forester, a jewelry store, has developed a sustainable competitive advantage. Which of the following characteristics of Forester is most likely to be the reason for this advantage?
Answer: B
Explanation: Training knowledgeable and helpful salespeople is a sustainable competitive advantage that is hard to replicate.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
24) Which of the following characteristics is most likely to be the least sustainable competitive advantage?
Answer: D
Explanation: Having more sales promotions is the least sustainable competitive advantage compared to the other options.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
25) Which of the following characteristics is most likely to be the more sustainable competitive advantage?
Answer: C
Explanation: The ability to get scarce merchandise is the most sustainable competitive advantage compared to the other options.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
26) Which of the following characteristics of a footwear store would most likely be its least sustainable competitive advantage?
Answer: E
Explanation: Lowering prices can easily be replicated, and hence, it is not a sustainable competitive advantage.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
27) John plans to start a grocery store in his locality. Which of the following is most likely to give him the least sustainable competitive advantage in the market?
Answer: B
Explanation: Recruiting more employees can easily be replicated, and hence, it is not a sustainable competitive advantage.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
28) Sally’s LLC, a local supermarket, has all of the following characteristics. Which of the following characteristics of Sally’s is most likely to be a more sustainable competitive advantage?
Answer: C
Explanation: A shared system with vendors is a sustainable competitive advantage that is hard to replicate.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
29) Establishing a sustainable competitive advantage is the key to ________ performance.
Answer: E
Explanation: Establishing a sustainable competitive advantage is the key to long-term financial performance.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
30) Although Rosa visits several retailers when shopping for suits, she always buys suits at Bow and Arrow Inc. Which of the following approaches best demonstrates her affinity for Bow and Arrow Inc.?
Answer: A
Explanation: Customer loyalty is evident when customers are committed to buying merchandise and services from a particular retailer.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
31) Tara gets her oil changed only at Tires Plus Inc. This commitment to Tires Plus Inc. illustrates
Answer: D
Explanation: Customer loyalty is evident when customers are committed to buying merchandise and services from a particular retailer.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
32) My Favorite Quilt Shop offers members of their Fabric Lovers Club merchandise worth $20 for every $200 they purchase plus additional discounts on classes and new fabric lines. The Fabric Lovers Club is a good way to develop
Answer: D
Explanation: Customer loyalty is evident when customers are committed to buying merchandise and services from a particular retailer.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
33) Myra wanted to purchase a vase as a wedding gift. Pier 1 Imports offers a better assortment and slightly lower prices, but she immediately went to her local gift shop instead of Pier 1 Imports. This is an example of
Answer: E
Explanation: Customer loyalty means that customers are committed to buying merchandise and services from a particular retailer. Loyalty means that customers will be reluctant to switch and patronize a competitive retailer.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
34) Retailers can foster customer loyalty by
Answer: B
Explanation: Approaches for developing customer loyalty include building a strong brand image, creating a unique positioning in the target market, offering unique merchandise, providing excellent customer service, implementing a customer relationship management program, and building a retail community.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
35) Wendy’s has established itself in the fast food market as one of the top five restaurants in the city. Customers frequent Wendy’s because of the impeccable quality of food associated with it. Which of the following is most likely to be the reason for Wendy’s sustainable competitive advantage?
Answer: B
Explanation: Customers frequent Wendy’s because of the impeccable quality of food associated with its name. Hence, the brand image is the sustainable competitive advantage.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
36) Positioning is the process of
Answer: B
Explanation: A retailer’s brand image reflects its positioning strategy. Positioning is the design and implementation of a retail mix to create an image of the retailer in the customer’s mind relative to its competitors.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
37) ________ is the design and implementation of a retail mix in order to create an image of the retailer within the customer’s mind relative to its competitors.
Answer: B
Explanation: Positioning is the design and implementation of a retail mix in order to create an image of the retailer within the customer’s mind relative to its competitors.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
38) Customers who shop at Books-A-Million find that it has a large selection of books, in addition to a helpful and friendly staff. Furthermore, they can enjoy a peaceful place to read while sipping a cappuccino at its in-store Joe Muggs Café. This intimate perception of the store indicates its ________ strategy.
Answer: C
Explanation: Positioning refers to the image that the customer has of the store relative to its competitors.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
39) ________ are developed such that the distance between two retailers’ positions on the map indicates how similar those stores appear, according to consumers.
Answer: A
Explanation: Perceptual maps are developed such that the distance between two retailers’ positions on the map indicates how similar the stores appear, according to consumers. A perceptual map is frequently used to represent the customer’s image and preferences for retailers.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
40) In perceptual maps, retailers that are closer to an ideal point are evaluated
Answer: E
Explanation: In perceptual maps, retailers that are closer to an ideal point are evaluated more favorably by the consumers in the segment than are retailers located farther away.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
41) Which of the following is most likely to be a disadvantage for a retailer in developing customer loyalty through offering popular national brands?
Answer: C
Explanation: It is difficult for a retailer to develop customer loyalty through its merchandise offerings, because most competitors can purchase and sell the same popular national brands.
Difficulty: 3 Hard
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
42) Competitive retailers can sell the same popular-national brands. Which of the following should retailers do to secure a competitive advantage?
Answer: E
Explanation: It is difficult for a retailer to develop customer loyalty through its merchandise offerings, because most competitors can purchase and sell the same popular national brands. Many retailers thus develop private-label brands (also called store brands or own brands) that are marketed by and available only from that retailer to keep customers loyal.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
43) La Rouge, a fabric store, is one of the most famous in the country. Customers flock to the store from all across the nation for its exclusive collection of store brands. Which of the following is most likely to be the sustainable competitive advantage of La Rouge?
Answer: A
Explanation: Customers frequent La Rouge for its unique merchandise. Private-label brands (store brands or own brands) are products developed and marketed by a retailer and available only from that retailer.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
44) Which of the following is true of private-label brands?
Answer: E
Explanation: Private-label brands are products developed and marketed by a retailer and available only from that retailer.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
45) Private-label brands are also called
Answer: B
Explanation: Private-label brands are also called store brands or own brands.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
46) Kola is a chain of supermarkets across the country. Kola’s sales staff treat their customers very well, which in turn creates great customer satisfaction. Which of the following is most likely to be the sustainable competitive advantage of Kola?
Answer: C
Explanation: Retailers also can develop customer loyalty by offering excellent customer service.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
47) Which of the following is an opportunity for retailers to develop a sustainable competitive advantage?
Answer: D
Explanation: The best option for building a long-term advantage is good customer service, as the other choices are easily replicated by competitors.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
48) Customer relationship management programs are also known as
Answer: E
Explanation: Customer relationship management programs are also known as loyalty or frequent-shopper programs.
Difficulty: 1 Easy
Topic: Customer Relationship Management Process
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
49) Which of the following is a suggested method for improving the efficiency of internal operations?
Answer: C
Explanation: Efficiency of internal operations can be improved by human resource management and distribution and information systems.
Difficulty: 2 Medium
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
50) Developing programs to motivate and coordinate employee efforts, providing incentives, fostering a positive organizational culture, and managing diversity are functions of the
Answer: A
Explanation: Retailers build their human resource assets by developing programs to motivate and coordinate employee efforts, provide appropriate incentives, foster a strong and positive organizational culture and environment, and manage diversity.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
51) Which of the following is an advantage of the use of sophisticated distribution and information systems?
Answer: B
Explanation: The use of sophisticated distribution and information systems offers an opportunity for retailers to reduce operating costs—the costs associated with running the business—and make sure that the right merchandise is available at the right time and place.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
52) Sam loves shopping. She frequently goes window shopping in the city. During times of need, she visits the nearest supermarket even though she loathes going there. Which of the following is most likely to be the reason why Sam shops in the supermarket?
Answer: D
Explanation: Location is the most important factor determining which store a consumer patronizes. For example, most people shop at the supermarket closest to where they live.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
53) The best way for a retailer to develop a sustainable competitive advantage is to
Answer: D
Explanation: A retailer should have multiple sources of competitive advantages to be competitive in today’s marketplace.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
54) A ________ is a growth opportunity directed toward existing customers using the retailer’s present retailing format.
Answer: B
Explanation: A market penetration growth opportunity is a growth opportunity directed toward existing customers using the retailer’s present retailing format.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
55) Walgreens has had rapid growth in their store openings. Many times, they have stores within just a few blocks of each other. This is an example of Walgreens practicing
Answer: C
Explanation: With market penetration, retailers use their existing retail format and devise approaches to get current customers to visit the retailer more often or to buy more. Market penetration approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
56) A bagel shop that decides to open up an hour earlier every morning is taking advantage of a ________ opportunity.
Answer: A
Explanation: With market penetration, retailers use their existing retail format and devise approaches to get current customers to visit the retailer more often or to buy more. Market penetration approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
57) Bine Lane is a fabric store that sells only cotton clothing. After a situation analysis, the marketing team of Bine Lane wants its current customers to visit and purchase from the store more frequently. Which of the following growth strategies should Bine Lane follow to achieve its objective?
Answer: E
Explanation: A market penetration growth opportunity is a growth opportunity directed toward existing customers using the retailer’s present retailing format. Such opportunities involve either attracting new consumers from the retailer’s current target market who don’t patronize the retailer currently or devising approaches that get current customers to visit the retailer more often and/or buy more merchandise on each visit.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
58) Which of the following is an example of a market penetration growth opportunity?
Answer: C
Explanation: Market penetration approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
59) Cross-selling is most commonly practiced with the
Answer: E
Explanation: Cross-selling is most commonly practiced with the market penetration growth opportunity.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
60) A ________ involves using the retailer’s existing retail format in new market segments.
Answer: A
Explanation: A market expansion growth opportunity involves using the retailer’s existing retail format in new market segments.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
61) Alvo’s, a producer of candy, has decided to expand its operations geographically. Which of the following strategies should Alvo’s use to achieve its objective?
Answer: D
Explanation: A market expansion growth opportunity involves using the retailer’s existing retail format in new market segments.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
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62) When Home Movies Inc. opened stores in other countries, it increased the company’s international market share. Home Movies took advantage of a ________ opportunity.
Answer: B
Explanation: Market expansion involves using the retailer’s existing retail format in new market segments.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
63) Which of the following is an example of a market expansion growth opportunity?
Answer: B
Explanation: A market expansion growth opportunity involves using the retailer’s existing retail format in new market segments.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
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64) A ________ is an opportunity in which a retailer develops a new retail mix for the same target market.
Answer: A
Explanation: A retail format development growth opportunity is an opportunity in which a retailer develops a new retail format—a format with a different retail mix—for the same target market.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
65) Ashton, a chain of supermarkets, intends to change its pricing policy and promotional mix but intends on catering to the same market segment. Which of the following growth strategies will best suit Ashton LLC?
Answer: C
Explanation: A retail format growth opportunity is an opportunity in which a retailer develops a new retail format—a format with a different retail mix—for the same target market.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
66) When Nordstrom department stores launched a website to sell its merchandise to its present customers; it took advantage of a ________ opportunity.
Answer: E
Explanation: Retail format development is when the retailer develops a new retail format for the same target market; the online retailing was the new format.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
67) A ________ is one in which a retailer introduces a new retail format directed toward a market segment that’s not currently served by the retailer.
Answer: C
Explanation: A diversification growth opportunity is one in which a retailer introduces a new retail format directed toward a market segment that’s not currently served by the retailer.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
68) Krueger Burgers, a chain of restaurants, intends to change its pricing policy and promotional mix to cater to a new market segment. Which of the following growth strategies will best suit Krueger Burgers?
Answer: D
Explanation: A diversification growth opportunity is one in which a retailer introduces a new retail format directed toward a market segment that’s not currently served by the retailer.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
69) In a related diversification growth opportunity,
Answer: E
Explanation: In a related diversification growth opportunity, the retailer’s present target market and retail format share something in common with the new opportunity.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
70) Which of the following is an example of related diversification?
Answer: B
Explanation: In a related diversification growth opportunity, the retailer’s present target market and retail format share something in common with the new opportunity. This commonality might entail purchasing from the same vendors, operating in similar locations, using the same distribution or management information system, or advertising in the same newspapers to similar target markets.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
71) An unrelated diversification growth opportunity
Answer: E
Explanation: An unrelated diversification growth opportunity has little commonality between the retailer’s present business and the new growth opportunity.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
72) Which of the following is an example of unrelated diversification?
Answer: B
Explanation: An unrelated diversification growth opportunity has little commonality between the retailer’s present business and the new growth opportunity.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
73) Which of the following statements is true of vertical integration?
Answer: A
Explanation: Vertical integration describes diversification by retailers into wholesaling or manufacturing.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
74) Jose runs a gallery that specializes in neon art with an emphasis on vacation icons like flamingos, dolphins, and palm trees. Since demand was high and supplies were low, he decided to buy an old warehouse and then hire craftspeople to work there in order to produce the art. He would provide them with all of the supplies they needed, and he would be their only customer. Jose engaged in
Answer: E
Explanation: Vertical integration means that the retailer has invested in manufacturing merchandise that the retailer will sell.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
75) Designing private-label merchandise is a(n) ________ because it builds on the retailer’s knowledge of its customers.
Answer: C
Explanation: Designing private-label merchandise is a related diversification growth opportunity because it builds on the retailer’s knowledge of its customers.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
76) Which of the following retail growth strategies has the greatest chance for succeeding?
Answer: B
Explanation: Typically, retailers have the greatest competitive advantage and most success when they engage in opportunities that are similar to their present retail operations and markets. Thus, market penetration growth opportunities have the greatest chances of succeeding because they build on the retailer’s present bases of advantage and don’t involve entering new, unfamiliar markets or operating new, unfamiliar retail formats.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
77) Retailers have the least opportunity to exploit a competitive advantage when they pursue
Answer: C
Explanation: Retailers have the least opportunity to exploit a competitive advantage when they pursue diversification opportunities.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
78) The emerging international markets that receive the most attention from global retailers are collectively referred to as the ________ nations.
Answer: E
Explanation: The emerging international markets that receive the most attention from global retailers are Brazil, Russia, India, and China, collectively referred to as the BRIC nations
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
79) Which of the following statements is true of the challenges faced by organized retailing in India?
Answer: C
Explanation: Previously, government regulations greatly restricted foreign investments in retailing; today, though some of the restrictions have been relaxed, foreign retailers still must comply with a myriad of regulations before opening stores and shipping merchandise.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
80) Which of the following statements is true of the challenges faced by organized retailing in China?
Answer: D
Explanation: Doing business in China is challenging. Operating costs are increasing, managerial talent is becoming more difficult to find and retain, and an underdeveloped and inefficient supply chain predominates.
Difficulty: 2 Medium
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
81) Which of the following statements is true of the challenges faced by organized retailing in Russia?
Answer: A
Explanation: Retailers often cannot rely on domestic products because the quality of products made in Russia tends to be poor.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
82) Mindy’s, a fashion brand, has a significant cost benefit that facilitates success in international markets in which price plays an important role in consumer decision making. Which of the following is most likely a reason for Mindy’s success in international markets?
Answer: E
Explanation: This is an example of a globally sustainable competitive advantage. Entry into nondomestic markets is most successful when the expansion opportunity builds on the retailer’s core bases of competitive advantage.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
83) Papa Bean, a global chain of pizzerias, has operations in more than 80 countries around the world. Its menu varies considerably in different countries, assimilating minute details from the local culture to add to its truly global flavor. Which of the following is most likely a reason for the success of Papa Bean in international markets?
Answer: B
Explanation: Successful global retailers recognize cultural differences and adapt their core strategy to the needs of local markets. This is an example of adaptability.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
84) Fresh Foods, a chain of international supermarkets, has operations in 20 countries around the world. Fresh Foods always encourages the rapid development of local management and retains few expatriates in its overseas operations. Fresh Foods’ management ranks are truly international. Which of the following is most likely a reason for the success of Fresh Foods in international markets?
Answer: A
Explanation: To be global, retailers must think globally. This is an example of success through a global culture.
Difficulty: 2 Medium
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
85) Lezos, a chain of international restaurants, has operations in more than 50 countries around the world. The company has a practice of investing in projects long enough for them to become successful. Which of the following is most likely a reason for the success of Lezos in international markets?
Answer: D
Explanation: Successful global retailers have the ability to keep investing in projects long enough to become successful. This is an example of success because of the availability of financial resources.
Difficulty: 2 Medium
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
86) ________ occurs when a retail firm invests in and owns a retail operation in a foreign country.
Answer: C
Explanation: Direct investment occurs when a retail firm invests in and owns a retail operation in a foreign country.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
87) Toss, a chain of sports equipment retailers, plans to invest in a retail operation in a foreign country. Which of the following categories of investments does this belong to?
Answer: E
Explanation: Direct investment occurs when a retail firm invests in and owns a retail operation in a foreign country.
Difficulty: 3 Hard
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
88) Which of the following statements is a key advantage of direct investments?
Answer: A
Explanation: A key advantage of direct investment is that the retailer has complete control of the operations.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
89) A(n) ________ is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.
Answer: B
Explanation: A joint venture is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
90) Flee, a chain of electronic stores, plans to grow geographically. It has tied up with local retailers in international markets to form a new company in which ownership, control, and profits are shared between all involved parties. Which of the following entry strategies is being followed by Flee?
Answer: D
Explanation: A joint venture is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
91) Which of the following statements is an advantage of a joint venture?
Answer: E
Explanation: A joint-venture entry strategy reduces the entrant’s risks. In addition to sharing the financial burden, the local partner provides an understanding of the market and has access to local resources, such as vendors and real estate.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
92) Which of the following statements is a disadvantage of a joint venture?
Answer: C
Explanation: Problems with a joint venture entry approach can arise if the partners disagree or the government places restrictions on the repatriation of profits.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
93) A(n) ________ is a collaborative relationship between independent firms.
Answer: A
Explanation: A strategic alliance is a collaborative relationship between independent firms.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
94) MarMa, a retailer of auto accessories, plans to grow geographically. It has tied up with independent international firms to facilitate its local logistical activities. Which of the following entry strategies is being followed by MarMa?
Answer: E
Explanation: A strategic alliance is a collaborative relationship between independent firms. A retailer might enter an international market through direct investment but use independent firms to facilitate its local logistical and warehousing activities.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
95) Which of the following statements is true of franchising?
Answer: B
Explanation: Franchising offers the lowest risk and requires the least investment but also has the lowest potential return on investment.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
96) Which of the following statements is a disadvantage of franchising?
Answer: D
Explanation: Franchising offers the lowest risk and requires the least investment but also has the lowest potential return on investment. The retailer has limited control over the retail operations in the foreign country, its potential profit is reduced, and the risk of assisting in the creation of a local domestic competitor increases.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
97) Which of the following steps is typically the first step in the strategic retail planning process?
Answer: C
Explanation: Defining the business mission is typically the first step in the strategic planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
98) Dave is a part of the strategic retail planning process in his organization. He has defined the business mission. Which of the following steps is most likely Dave’s next stage in the strategic planning process?
Answer: A
Explanation: After developing a mission statement and setting objectives, the next step in the strategic planning process is to conduct a SWOT analysis. A SWOT analysis involves an analysis of the retailer’s internal environment (strengths and weaknesses) and external environment (opportunities and threats).
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
99) Which of the following factors is classified as a market factor?
Answer: E
Explanation: Market size, market growth, cyclicality of sales, and seasonality are classified as market factors.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
100) Which of the following factors is classified as a competitive factor?
Answer: B
Explanation: Barriers to entry, bargaining power of vendors, and competitive rivalry are classified as competitive factors.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
101) Which of the following is true of scale economies?
Answer: C
Explanation: Scale economies are cost advantages due to a retailer’s size.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
102) Which of the following factors is classified as environmental dynamics?
Answer: D
Explanation: Technological changes, economic/consumer/social changes, and regulatory changes are classified as environmental dynamics.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
103) Which of the following is a condition that may lead to competitive rivalry?
Answer: A
Explanation: Conditions that may lead to intense rivalry include (1) a large number of competitors that are all about the same size, (2) slow growth, (3) high fixed costs, and (4) a lack of perceived differences between competing retailers.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
104) Josh is responsible for the strategic retail planning process in his organization. He has defined the business mission and conducted a SWOT analysis. Which of the following steps is most likely his next stage in the strategic retail planning process?
Answer: C
Explanation: Identifying strategic opportunities is typically the next step after conducting a SWOT analysis in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
105) Luke is responsible for the strategic retail planning process in his organization. He is currently identifying the strategic opportunities. Which of the following steps is most likely to have been Luke’s previous step before identifying the strategic opportunities?
Answer: E
Explanation: Identifying strategic opportunities is typically the stage after conducting a SWOT analysis in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
106) Zara is responsible for the strategic retail planning process in her organization. She has identified the strategic opportunities. Which of the following steps is most likely Zara’s next stage in the strategic retail planning process?
Answer: B
Explanation: Evaluating strategic opportunities is typically the stage after identifying strategic opportunities in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
107) Which of the following steps is typically the next step after evaluating strategic opportunities in the strategic retail planning process?
Answer: A
Explanation: After evaluating strategic alternatives, specific objectives are established in the typical strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
108) Which of the following steps is typically the previous step before evaluating the strategic opportunities in the strategic retail planning process?
Answer: C
Explanation: Identifying strategic opportunities is typically the previous stage before evaluating strategic opportunities in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
109) Which of the following steps is typically the next step after establishing specific objectives and allocating resources in the strategic retail planning process?
Answer: B
Explanation: Developing a retail mix to implement the strategy is typically the next step after establishing specific objectives and allocating resources in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
110) Which of the following steps is typically the previous step before establishing specific objectives and allocating resources in the strategic retail planning process?
Answer: E
Explanation: Evaluating strategic opportunities is typically the previous step before establishing specific objectives and allocating resources in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
111) Which of the following steps is typically the next step after developing a retail mix to implement the strategy in the strategic retail planning process?
Answer: D
Explanation: Evaluating performance and making adjustments is typically the next step after developing a retail mix to implement the strategy in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
112) Which of the following steps is typically the previous step before developing a retail mix to implement the strategy in the strategic retail planning process?
Answer: A
Explanation: Establishing specific objectives and allocating resources is typically the previous step before developing a retail mix to implement the strategy in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
113) Which of the following steps is typically the last step in the strategic retail planning process?
Answer: C
Explanation: Evaluating performance and making adjustments is typically the last step in the strategic planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
114) Which of the following steps is most likely to be the previous step before evaluating performance and making adjustments in the strategic retail planning process?
Answer: B
Explanation: Developing a retail mix to implement the strategy is the previous step before evaluating performance and making adjustments in the strategic retail planning process.
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
115) Name five approaches for retailers to develop a sustainable competitive advantage.
Answer: The five approaches for retailers to develop a sustainable competitive advantage are
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
116) Describe customer loyalty and the ways in which retailers can build customer loyalty.
Answer: Customer loyalty means that customers are committed to buying merchandise and services from a particular retailer. A retailer can build customer loyalty by
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
117) Define positioning.
Answer: Positioning is the design and implementation of a retail mix to create an image of the retailer in the customer’s mind relative to its competitors.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
118) Why would a retailer desire to have private-label or store brands?
Answer: It is difficult for a retailer to develop customer loyalty through its merchandise offerings because most competitors can purchase and sell the same popular national brands. But many retailers build customer loyalty by developing private-label brands. These brands that are found only at the retailer’s stores can build customer loyalty, resulting in a sustainable competitive advantage.
Difficulty: 1 Easy
Topic: How Retailers Build a Sustainable Competitive Advantage
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
119) What are customer relationship management programs?
Answer: Customer relationship management (CRM) programs, also called loyalty or frequent shopper programs, are activities that focus on identifying and building loyalty with a retailer’s most valued customers. These programs typically involve offering customers rewards based on the amount of services or merchandise they purchase. For example, airlines offer free tickets to travelers who have flown a prescribed number of miles, and Subway gives customers a free sandwich for each 10 they purchase.
Difficulty: 1 Easy
Topic: Customer Relationship Management Process
Learning Objective: 05-02 Illustrate how retailers build a sustainable competitive advantage.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
120) How can a retailer use the market penetration opportunity to foster growth?
Answer: Growth can be achieved by using the market penetration opportunity by attracting customers in the retailer’s current target market who don’t patronize the retailer currently or devising strategies that induce current customers to visit the retailer more often and/or buy more merchandise on each visit.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
121) Differentiate between related and unrelated diversification.
Answer: In a related diversification growth opportunity, the retailer’s present target market and retail format share something in common with the new opportunity. This commonality might entail purchasing from the same vendors, operating in similar locations, using the same distribution or management information system, or advertising in the same newspapers to similar target markets. In contrast, an unrelated diversification growth opportunity has little commonality between the retailer’s present business and the new growth opportunity.
Difficulty: 2 Medium
Topic: Strategic Growth Opportunities for Retailers
Learning Objective: 05-03 Classify the different strategic growth opportunities retailers pursue.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
122) List the key opportunities for success in global retailing.
Answer: Four characteristics of retailers that have successfully exploited international growth opportunities are
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
123) Describe franchising.
Answer: Franchising offers the lowest risk and requires the least investment but also has the lowest potential return on investment. The retailer has limited control over the retail operations in the foreign country, its potential profit is reduced, and the risk of assisting in the creation of a local domestic competitor increases.
Difficulty: 1 Easy
Topic: Global Growth Opportunities
Learning Objective: 05-04 Identify issues that arise as domestic retailers become global retailers.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
124) List the steps in the strategic retail planning process.
Answer: The following are the steps in the strategic retail planning process:
Difficulty: 2 Medium
Topic: Retail Strategic Planning and Operations
Learning Objective: 05-05 Know the steps retailers go through to develop a strategic plan.
Bloom’s: Remember
AACSB: Reflective Thinking; Communication
Accessibility: Keyboard Navigation
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
