Question

U.S. Electric, the maker of a highly innovative xenon light bulb, finds that it has excess inventory. The firm increases its advertising budget by 50 percent and doubles its sales staff. This company is operating as if it were in which of the following orientations?

Answer 1

U.S. Electric is operating with a sales orientation by increasing advertising and sales staff to manage excess inventory, focusing on high-volume sales rather than aligning with consumer demand.

Step-by-step explanation:

U.S. Electric, by increasing its advertising budget by 50 percent and doubling its sales staff to handle excess inventory, is operating with a sales orientation. This approach focuses on aggressive sales techniques to achieve high volumes, often regardless of whether the push aligns with customer demand. This strategy contrasts with a market orientation or production orientation, which would focus respectively on meeting consumer needs or improving production efficiency. Companies like Samsung epitomize the innovative firm, seeking to gain profits by introducing products with unique features that consumers desire. However, in a perfectly competitive market, aggressive advertising is typically not sustainable as a long-term strategy due to the nature of the market where products are usually homogenous and price competition is fierce.