Question 1

Which of the following is NOT a reason for fragmentation?

Accepted Answer

A)  Lack of scale economies may mean that there are few, if any, cost advantages to large size. 
B)  There is no established brand loyalty in the market segment. 
C)  The lack of scale economies and national brand loyalty often implies low entry barriers. 
D)  The company is specialty company that operates in local or regional markets or is focused on specialized or custom-made products. 
E)  Brand loyalty in the industry may primarily be local. 
A)  Lack of scale economies may mean that there are few, if any, cost advantages to large size. 
B)  There is no established brand loyalty in the market segment. 
C)  The lack of scale economies and national brand loyalty often implies low entry barriers. 
D)  The company is specialty company that operates in local or regional markets or is focused on specialized or custom-made products. 
E)  Brand loyalty in the industry may primarily be local. B

Question 2

A product proliferation strategy can be used to lower the entry barriers in a mature industry.

Accepted Answer

A) True 
 B)False  False

Question 3

In a declining industry, a company may utilize a harvest strategy and:

Accepted Answer

A)  significantly increase its investment in a business. 
B)  extract maximum profits from its investments. 
C)  venture into new market segments with new products. 
D)  expand the number of stores or outlets for its products. 
E)  significantly increase its advertising expenditure. 
A)  significantly increase its investment in a business. 
B)  extract maximum profits from its investments. 
C)  venture into new market segments with new products. 
D)  expand the number of stores or outlets for its products. 
E)  significantly increase its advertising expenditure. B

Question 4

Which of the following statements about embryonic industries is true?

Accepted Answer

A)  They are characterized by very a high initial customer demand. 
B)  They are characterized by well-developed distribution channels. 
C)  They involve low production costs because of large volumes of production. 
D)  They face the challenge of educating customers who are not familiar with their product benefits. 
E)  They enjoy the abundance of complementary products that help increase sales. 
A)  They are characterized by very a high initial customer demand. 
B)  They are characterized by well-developed distribution channels. 
C)  They involve low production costs because of large volumes of production. 
D)  They face the challenge of educating customers who are not familiar with their product benefits. 
E)  They enjoy the abundance of complementary products that help increase sales.

Question 5

Which of the following represents the correct chronology for market development?

Accepted Answer

A)  embryonic, mass market, growth, mature, market saturation 
B)  embryonic, growth, mass market, mature, market saturation 
C)  embryonic, growth, mass market, market saturation, mature 
D)  growth, embryonic, mass market, mature, market saturation 
E)  mass market, embryonic, growth, market saturation, mature 
A)  embryonic, mass market, growth, mature, market saturation 
B)  embryonic, growth, mass market, mature, market saturation 
C)  embryonic, growth, mass market, market saturation, mature 
D)  growth, embryonic, mass market, mature, market saturation 
E)  mass market, embryonic, growth, market saturation, mature

Question 6

Which of the following statements about declining industries is true?

Accepted Answer

A)  Not all segments of an industry typically decline at the same rate. 
B)  A declining industry should ideally use the leadership strategy when it does not have any strengths and the competition is low. 
C)  A divestment strategy is when a company in a declining industry tries to improve sales by improving product quality. 
D)  The greater the exit barriers of a declining industry, the lower the intensity of competition. 
E)  The intensity of competition is lower in declining industries that sell commodity-like products. 
A)  Not all segments of an industry typically decline at the same rate. 
B)  A declining industry should ideally use the leadership strategy when it does not have any strengths and the competition is low. 
C)  A divestment strategy is when a company in a declining industry tries to improve sales by improving product quality. 
D)  The greater the exit barriers of a declining industry, the lower the intensity of competition. 
E)  The intensity of competition is lower in declining industries that sell commodity-like products.

Question 7

Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.

Accepted Answer

A) True 
 B)False

Question 8

The last group of customers to enter the market are characterized as practical, generally understand the value of new technology, weigh the benefits of adopting new products against the costs, and wait to enter the market until they are confident they will benefit.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an advantage of franchising?

Accepted Answer

A)  It gives the franchisor the same level of tight control over franchisees as does chaining. 
B)  It allows the franchisor to earn all the profits made by franchisees. 
C)  It is beneficial for franchisees because they do not have to face higher capital costs. 
D)  It helps the franchisees by relieving them of the responsibility of running operations. 
E)  It can help the franchisor expand his or her business rapidly. 
A)  It gives the franchisor the same level of tight control over franchisees as does chaining. 
B)  It allows the franchisor to earn all the profits made by franchisees. 
C)  It is beneficial for franchisees because they do not have to face higher capital costs. 
D)  It helps the franchisees by relieving them of the responsibility of running operations. 
E)  It can help the franchisor expand his or her business rapidly.

Question 10

Which of the following strategies requires a company to limit or decrease its investment in a business and to extract, or "milk," the proceeds of its investment as much as it can?

Accepted Answer

A)  Market concentration strategy 
B)  Share-increasing strategy 
C)  Cost-leadership strategy 
D)  Hold-and-maintain strategy 
E)  Harvest strategy 
A)  Market concentration strategy 
B)  Share-increasing strategy 
C)  Cost-leadership strategy 
D)  Hold-and-maintain strategy 
E)  Harvest strategy

Question 11

Which of the following correctly describes a non-price competitive strategy based on product differentiation?

Accepted Answer

A)  Market penetration uses new marketing segments and existing products. 
B)  Market development uses new marketing segments and new products. 
C)  Product development uses existing marketing segments and existing products. 
D)  Product proliferation uses new marketing segments and new products. 
E)  Price leadership uses existing marketing segments and existing products. 
A)  Market penetration uses new marketing segments and existing products. 
B)  Market development uses new marketing segments and new products. 
C)  Product development uses existing marketing segments and existing products. 
D)  Product proliferation uses new marketing segments and new products. 
E)  Price leadership uses existing marketing segments and existing products.

Question 12

The restaurant industry is an example of a fragmented industry.

Accepted Answer

A) True 
 B)False

Question 13

Horizontal mergers often lead to industry fragmentation.

Accepted Answer

A) True 
 B)False

Question 14

Later entrants to embryonic industries have the advantage over earlier entrants because they do not have the development or educational costs of figuring out how to produce the technology or teaching consumers about its' benefits.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about horizontal mergers is true?

Accepted Answer

A)  Horizontal mergers enable companies to achieve economies of scale. 
B)  Horizontal mergers result in the fragmentation of the industry. 
C)  The horizontal merger strategy has been very successful in businesses with zero cases of failure. 
D)  Companies that establish a network of distributor outlets to obtain the advantages of a low-cost position are known as horizontal mergers. 
E)  Companies that adopt the strategy of centralization to gain control over all business units are known as horizontal mergers. 
A)  Horizontal mergers enable companies to achieve economies of scale. 
B)  Horizontal mergers result in the fragmentation of the industry. 
C)  The horizontal merger strategy has been very successful in businesses with zero cases of failure. 
D)  Companies that establish a network of distributor outlets to obtain the advantages of a low-cost position are known as horizontal mergers. 
E)  Companies that adopt the strategy of centralization to gain control over all business units are known as horizontal mergers.

Question 16

Factors leading to the slow growth of demand for products in embryonic industries include all of the following EXCEPT:

Accepted Answer

A)  the poor quality of the first products. 
B)  a lack of complementary products. 
C)  customer passion for the products. 
D)  high production costs. 
E)  poorly developed distribution channels. 
A)  the poor quality of the first products. 
B)  a lack of complementary products. 
C)  customer passion for the products. 
D)  high production costs. 
E)  poorly developed distribution channels.

Question 17

Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company has been facing competition from new entrants. The new entrants offer gadgets in different colors, with compelling artwork embossed on the cases. Seeing the interest in this market, Gadgetbug introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug's attempt to cater to the different segments of customers to deter competition demonstrates:

Accepted Answer

A)  price signaling. 
B)  product proliferation. 
C)  a harvest strategy. 
D)  a limit price strategy. 
E)  diseconomies of scale. 
A)  price signaling. 
B)  product proliferation. 
C)  a harvest strategy. 
D)  a limit price strategy. 
E)  diseconomies of scale.

Question 18

Which of the following factors in an industry is most likely to cause excess capacity?

Accepted Answer

A)  Technologically outdated production units 
B)  High customer demand 
C)  A company's investments in newer production technology 
D)  Lack of competition from new entrants 
E)  Limited number of outlets in certain locations 
A)  Technologically outdated production units 
B)  High customer demand 
C)  A company's investments in newer production technology 
D)  Lack of competition from new entrants 
E)  Limited number of outlets in certain locations

Question 19

Laggards are technologically sophisticated customers willing to tolerate the limitations of the product.

Accepted Answer

A) True 
 B)False

Question 20

When a company decides to exit an industry by selling its business assets to another company, it is said to be using which of the following strategies?

Accepted Answer

A)  Market penetration 
B)  Divestment 
C)  Niche 
D)  Downsizing 
E)  Outsourcing 
A)  Market penetration 
B)  Divestment 
C)  Niche 
D)  Downsizing 
E)  Outsourcing

Which of the following is NOT a reason for fragmentation?

A product proliferation strategy can be used to lower the entry barriers in a mature industry.

In a declining industry, a company may utilize a harvest strategy and:

Which of the following statements about embryonic industries is true?

Which of the following represents the correct chronology for market development?

Which of the following statements about declining industries is true?

Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.

The last group of customers to enter the market are characterized as practical, generally understand the value of new technology, weigh the benefits of adopting new products against the costs, and wait to enter the market until they are confident they will benefit.

Which of the following is an advantage of franchising?

Which of the following strategies requires a company to limit or decrease its investment in a business and to extract, or "milk," the proceeds of its investment as much as it can?

Which of the following correctly describes a non-price competitive strategy based on product differentiation?

The restaurant industry is an example of a fragmented industry.

Horizontal mergers often lead to industry fragmentation.

Later entrants to embryonic industries have the advantage over earlier entrants because they do not have the development or educational costs of figuring out how to produce the technology or teaching consumers about its' benefits.

Which of the following statements about horizontal mergers is true?

Factors leading to the slow growth of demand for products in embryonic industries include all of the following EXCEPT:

Which of the following factors in an industry is most likely to cause excess capacity?

Laggards are technologically sophisticated customers willing to tolerate the limitations of the product.

When a company decides to exit an industry by selling its business assets to another company, it is said to be using which of the following strategies?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters

Exam 6: Business-Level Strategy and the Industry Environment

Which of the following is NOT a reason for fragmentation?

A product proliferation strategy can be used to lower the entry barriers in a mature industry.

In a declining industry, a company may utilize a harvest strategy and:

Which of the following statements about embryonic industries is true?

Which of the following represents the correct chronology for market development?

Which of the following statements about declining industries is true?

Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.

The last group of customers to enter the market are characterized as practical, generally understand the value of new technology, weigh the benefits of adopting new products against the costs, and wait to enter the market until they are confident they will benefit.

Which of the following is an advantage of franchising?

Which of the following strategies requires a company to limit or decrease its investment in a business and to extract, or "milk," the proceeds of its investment as much as it can?

Which of the following correctly describes a non-price competitive strategy based on product differentiation?

The restaurant industry is an example of a fragmented industry.

Horizontal mergers often lead to industry fragmentation.

Later entrants to embryonic industries have the advantage over earlier entrants because they do not have the development or educational costs of figuring out how to produce the technology or teaching consumers about its' benefits.

Which of the following statements about horizontal mergers is true?

Factors leading to the slow growth of demand for products in embryonic industries include all of the following EXCEPT:

Which of the following factors in an industry is most likely to cause excess capacity?

Laggards are technologically sophisticated customers willing to tolerate the limitations of the product.

When a company decides to exit an industry by selling its business assets to another company, it is said to be using which of the following strategies?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters