Which of the following strategies would most likely be utilized by a market challenger in an industry?

• A. Aggressively attempting to increase market share by undercutting prices
• B. Focusing solely on niche markets with little competition
• C. Maintaining the status quo and avoiding competition
• D. Setting industry standards and leading innovation as the dominant firm

Answer: (A)

Verified step by step guidance

1. Understand the role of a market challenger: A market challenger is a firm that is not the market leader but aims to increase its market share and challenge the dominant firm.
2. Analyze the typical strategies of a market challenger: These often include aggressive tactics such as price cuts, advertising, or product improvements to attract customers from competitors.
3. Evaluate the given options in the context of a market challenger: - 'Aggressively attempting to increase market share by undercutting prices' aligns with the challenger's goal to gain market share. - 'Focusing solely on niche markets with little competition' is more typical of a market follower or niche player. - 'Maintaining the status quo and avoiding competition' is characteristic of a market follower or a firm with no aggressive growth strategy. - 'Setting industry standards and leading innovation as the dominant firm' describes the market leader, not a challenger.
4. Conclude that the strategy most likely used by a market challenger is to aggressively increase market share by undercutting prices, as this directly challenges the market leader and aims to capture more customers.
5. Remember that market challengers use competitive and proactive strategies to disrupt the market, unlike followers or leaders who have different strategic focuses.