Presented below is a sample response to a question #B for the company American Entertainment, Inc. This is for guidance only. As stressed in class, each company and their situation is different and the answers to the final question will vary considerably.

B. What does this theory recommend for this company? Explain.

Our analysis found that AE was pursuing Porter’s focus strategy by targeting the niche market of high-income customers for audio and video equipment in Miami-Dade County, Florida. We recommended in the Porter analysis that AE continue to pursue the same Porter competitive strategy as this was most appropriate for the future.

The proposed business strategy of targeted direct mail advertising to this group clearly continues to follow the same strategy. Our strategy does not entail any change in the focus group of customers. Accordingly, the proposed strategy is consistent with the Porter strategy we recommended for the firm.