Exam 6: Business-Level Strategy and the Industry Environment

Drawbacks to which of the following industry rivalry management strategies include allowing companies with high cost structures to survive without implementing efficiency strategies despite the fact that this leaves them vulnerable in the long term?

Which of the following statements about growing industries is true?

Music CDs and newspaper sales have been falling as users turn to the Internet for their music and news. Which of the following is NOT a strategy for companies in these declining industries?

The strategy used by cereal companies where they produce a wide array of different types of cereal and are quick to sell their own version of any product brought in by new entrants is an example of a product proliferation strategy.

Laggards are the customers who are the first ones to try and adopt a new technology.

A technology upgrading strategy is utilized by incumbent companies in a mature industry to deter entry by investing in costly technology upgrades that potential entrants would have trouble matching.

Which of the following individuals is most likely to fall under the category of laggards in the context of customer groups?

Relish Inc. created the first national chain of fast-food restaurants in a previously fragmented industry. This is called divestment.

Development of a mass market is the stimulus for an industry to change from growth to embryonic.

In his book Crossing the Chasm, Geoffrey Moore discusses some of the issues involved in marketing technologically new products as markets develop through different stages. What customer groups does Moore identify as critical to the movement into mass market, and what must companies do if they are to successfully cross the chasm?

What are the causes and effects of excess capacity? How can companies seek to control these effects? Why must companies exercise caution when using capacity control strategies?

The franchisor typically owns and funds each of its franchisees.

Which of the following is a way that a fragmented industry can be consolidated?

A divestment strategy's success is often dependent upon good timing.

Which of the following represents the difference in strategies for the innovators and early majority versus the mass market?

Armando, a technology enthusiast, is often willing to pay premium prices to always have the newest tech gadgets. Armando most likely belongs to which of the following group of customers?

Hydralicious, a juice bar, has been looking to expand its business. The company has given a few entrepreneurs in different locations the license to operate under its name. The entrepreneurs have permission to use the company's reputation and the business model to run operations. The entrepreneurs will be charged a fee, but they will also get a percentage of the profits. Which of the following strategies is Hydralicious most likely to be using?

Which of the following is NOT a strategy used by mature industries to manage industry rivalry?

A limit price strategy involves charging a price that is lower than that required to maximize profits in the short run to signal to new entrants that the incumbent has a low-cost structure that the entrant likely cannot match.

As markets develop demand is initially slow, accelerates as the technology becomes better understood and utilized and then declines as demand is increasingly limited to replacement demand.