Q.1 Which of the following best defines market penetration strategy?
Introducing new products in new markets
Selling more of existing products in existing markets
Expanding into international markets
Diversifying into unrelated businesses
Explanation - Market penetration focuses on increasing sales of current products in existing markets by attracting new customers or increasing usage by existing ones.
Correct answer is: Selling more of existing products in existing markets
Q.2 In Ansoff’s Growth Matrix, launching a new product in an existing market is known as?
Market development
Product development
Diversification
Market penetration
Explanation - Product development refers to creating and introducing new products into existing markets to increase growth opportunities.
Correct answer is: Product development
Q.3 Which of these is an example of market development strategy?
Selling an existing product to a new geographical region
Improving the features of an existing product
Merging with a competitor
Cross-selling complementary products
Explanation - Market development involves taking existing products to new market segments or geographical regions.
Correct answer is: Selling an existing product to a new geographical region
Q.4 Diversification strategy involves:
Selling more existing products to current customers
Entering new markets with new products
Reducing prices to beat competition
Improving distribution channels
Explanation - Diversification means introducing new products in new markets, usually the riskiest growth strategy.
Correct answer is: Entering new markets with new products
Q.5 Which of the following is the riskiest growth strategy?
Market penetration
Market development
Product development
Diversification
Explanation - Diversification is risky because it involves introducing new products into new markets, where the firm has little or no experience.
Correct answer is: Diversification
Q.6 A company reduces the price of its product to gain more market share. This is an example of:
Market penetration
Market development
Diversification
Product development
Explanation - Price reduction is a tactic under market penetration strategy to increase sales in existing markets.
Correct answer is: Market penetration
Q.7 Launching a smartphone with improved features in the same market is an example of:
Market penetration
Product development
Market development
Diversification
Explanation - Improving and introducing new versions of products in the same market falls under product development.
Correct answer is: Product development
Q.8 When a soft drink company starts selling packaged snacks, it is practicing:
Market penetration
Market development
Product development
Diversification
Explanation - Entering into a completely new product category is diversification.
Correct answer is: Diversification
Q.9 Which strategy aims to reduce dependency on a single product line?
Market penetration
Product development
Diversification
Market development
Explanation - Diversification reduces risk by spreading across different products and markets.
Correct answer is: Diversification
Q.10 Expanding a chain of restaurants from one city to multiple cities is an example of:
Product development
Diversification
Market penetration
Market development
Explanation - Expanding to new geographical markets with the same product/service is market development.
Correct answer is: Market development
Q.11 Which growth strategy is most suitable for a business in a saturated market?
Market penetration
Product development
Diversification
Retrenchment
Explanation - In saturated markets, growth often comes from innovation and launching new products to existing customers.
Correct answer is: Product development
Q.12 Backward integration refers to:
Acquiring suppliers
Acquiring distributors
Launching new products
Expanding into foreign markets
Explanation - Backward integration means controlling supply sources by acquiring or merging with suppliers.
Correct answer is: Acquiring suppliers
Q.13 Which is an example of forward integration?
A farmer setting up his own retail outlet
A retailer starting farming operations
A company introducing new products
A business entering foreign markets
Explanation - Forward integration means moving closer to customers, such as producers opening their own distribution channels.
Correct answer is: A farmer setting up his own retail outlet
Q.14 The main aim of market penetration is:
Reduce dependency on suppliers
Increase market share
Introduce new products
Enter new markets
Explanation - Market penetration focuses on gaining higher market share with existing products in existing markets.
Correct answer is: Increase market share
Q.15 Which of the following is NOT part of Ansoff’s Growth Matrix?
Market penetration
Product development
Cost leadership
Diversification
Explanation - Cost leadership is a Porter’s strategy, not part of Ansoff’s matrix.
Correct answer is: Cost leadership
Q.16 Which growth strategy involves least risk?
Diversification
Market penetration
Product development
Market development
Explanation - Market penetration is least risky since it deals with existing products in existing markets.
Correct answer is: Market penetration
Q.17 Which of the following is an internal growth strategy?
Mergers
Acquisitions
Market penetration
Joint ventures
Explanation - Internal growth strategies are based on firm’s own efforts, such as market penetration and product development.
Correct answer is: Market penetration
Q.18 Horizontal integration means:
Acquiring suppliers
Merging with competitors in the same industry
Opening new markets
Adding new products unrelated to core business
Explanation - Horizontal integration occurs when a business merges with or acquires competitors operating at the same stage of production.
Correct answer is: Merging with competitors in the same industry
Q.19 Which of these strategies helps in cost reduction due to economies of scale?
Horizontal integration
Diversification
Market development
Product development
Explanation - Merging with competitors increases scale and reduces cost per unit.
Correct answer is: Horizontal integration
Q.20 When a clothing brand enters the online retail space, it is an example of:
Backward integration
Forward integration
Diversification
Market penetration
Explanation - By opening online retail channels, the company moves closer to its customers.
Correct answer is: Forward integration
Q.21 Which growth strategy focuses on attracting customers from competitors?
Diversification
Market penetration
Product development
Backward integration
Explanation - By offering better prices, quality, or promotions, a company can capture competitors’ customers in existing markets.
Correct answer is: Market penetration
Q.22 A merger between two airlines is an example of:
Horizontal integration
Vertical integration
Diversification
Conglomeration
Explanation - Both companies operate in the same industry and stage of production.
Correct answer is: Horizontal integration
Q.23 Which of these is a defensive growth strategy?
Market development
Diversification
Retrenchment
Product development
Explanation - Retrenchment is defensive, involving cutting costs and reducing operations.
Correct answer is: Retrenchment
Q.24 When a company enters international markets with its existing product, this is:
Product development
Market development
Diversification
Market penetration
Explanation - Introducing existing products into new geographical markets is market development.
Correct answer is: Market development
Q.25 Which growth strategy can be both related and unrelated?
Market development
Product development
Diversification
Market penetration
Explanation - Diversification can be related (similar industries) or unrelated (completely different industries).
Correct answer is: Diversification