Final answer:
The statement about concentrated targeting strategy is true. The four-firm concentration ratio emphasizes the largest companies, while the Herfindahl-Hirschman Index accounts for the market share of all firms. Specializing in core competencies can lead businesses to greater success.
Step-by-step explanation:
The statement that a concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single market segment using one marketing mix is true.
A concentrated strategy allows a firm to tailor its product and marketing efforts to a specific niche, potentially achieving a strong presence and competitive advantage in that segment. This can result in a higher level of expertise, a better fit with the customer's needs, and more effective resource allocation.
In the context of market concentration measures, the four-firm concentration ratio does indeed place more emphasis on the largest four firms in a market, which could be just one or two dominant firms.
In contrast, the Herfindahl-Hirschman Index (HHI) considers the market shares of all firms in the market, squaring each firm's market share and summing the total to give more weight to firms with larger market shares while still including the impact of smaller firms.
Relating this to business practices, many businesses focus on their core competencies, specializing in a limited number of products or services.
This specialization often leads to greater success compared to trying to cater to a broad range of products, possibly because it allows the firm to concentrate its resources and efforts, making them more efficient and effective in their selected domain.