Question 1

The strategy in a mature industry to invest in infrastructure that would be cost-prohibitive for new entrants to deter new competition from entering the market is known as:

Accepted Answer

A)  product proliferation. 
B)  technology upgrading. 
C)  market penetration. 
D)  capacity control. 
E)  product development.

Question 2

Fragmented industries typically have high barriers to entry.

Accepted Answer

A) True 
 B)False

Question 3

How can a company take advantage of viral diffusion in a rapidly growing market?

Accepted Answer

A)  They can encourage experts in the field to use the product first. 
B)  They can give opinion leaders free products to use. 
C)  They can create a partnership with opinion leaders to help further develop the technology. 
D)  They can identify and court opinion leaders in a particular market. 
E)  All of these are ways for companies to take advantage of viral diffusion in a rapidly growing market.

Question 4

Most embryonic industries emerge from:

Accepted Answer

A)  a technological innovation. 
B)  product proliferation. 
C)  a lack of high entry barriers. 
D)  chaining. 
E)  franchising.

Question 5

The late majority customers are typically reached through specialized distribution channels, and products are often sold by word of mouth.

Accepted Answer

A) True 
 B)False

Question 6

The goal for a company in the growth stage of the industry life cycle is to maintain its relative competitive position in a rapidly expanding market.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about customer categories in growing industries is true?

Accepted Answer

A)  Laggards frequently adopt new products even when the benefits are not obvious. 
B)  Innovators are the customers who are the last ones to adopt a new product. 
C)  A typical late majority customer group is a behaviorally conservative set of customers. 
D)  Customers in the early majority generally do not understand the value of new technology. 
E)  Laggards form the leading wave or edge of the mass market.

Question 8

Which of the following is NOT an example of a fragmented industry?

Accepted Answer

A)  Custom-made jewelry 
B)  Aircraft manufacturing 
C)  Massage services industry 
D)  Catering 
E)  Landscaping

Question 9

Intensifying competition in a declining industry is dependent on which four factors? Explain how these factors are considered when a company chooses a strategy in a declining industry.

Accepted Answer

The answer of Intensifying competition in a declining industry is...

Question 10

Market penetration involves the creation of new or improved products to replace existing products.

Accepted Answer

A) True 
 B)False

Question 11

A company uses which of the following when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability?

Accepted Answer

A)  An acquisition strategy 
B)  Chaining 
C)  A divestment strategy 
D)  A niche strategy 
E)  Franchising

Question 12

Nutrimax Corp., a breakfast cereal company, has designed extensive and elaborate advertising campaigns for its existing products. The campaigns mainly focus on the features and benefits of the products that differentiate the cereals from the competition. Nutrimax Corp. is most likely to be using which of the following strategies?

Accepted Answer

A)  Market penetration 
B)  Product development 
C)  Product proliferation 
D)  Market development 
E)  Capacity control

Question 13

The strategy that company should pursue for the first group of customers to enter the market for a new product

Accepted Answer

A)  is to wait until the customer can see the benefits and appreciate the use of the new technology. 
B)  is to highlight the utility and longevity of the technology. 
C)  should focus on product values such as ease of use and reliability. 
D)  is to use their social influence to promote new technologies and their future vision support the diffusion of new innovations. 
E)  is to compare the benefits against the costs of adopting a new product.

Question 14

To compete in the fragmented restaurant industry, Starbucks built, and now operates, hundreds of restaurants across the United States and Canada. Which of the following strategies is Starbucks using?

Accepted Answer

A)  Acquisitions 
B)  Horizontal mergers 
C)  Franchising 
D)  Licensing 
E)  Chaining

Question 15

Which of the following is a disadvantage of franchising?

Accepted Answer

A)  It restricts the franchisor from expanding. 
B)  It results in the franchisor taking all the financial burden of the franchisees. 
C)  It results in the delegation of authority to franchisees, and the franchisor may not enjoy complete control. 
D)  It does not provide enough incentive to the franchisees to run operations effectively because franchisees are not entrepreneurs. 
E)  It requires the franchisees to create a new business model and plan strategies.

Question 16

Explicit price leadership, when companies jointly set prices, is illegal under antitrust laws.

Accepted Answer

A) True 
 B)False

Question 17

In a bid to expand its business and build a national brand, Omega Inc. has acquired several competing outlets in different locations. All the outlets are responsible for the production of smaller components. Omega believes that having a larger enterprise that can offer a full portfolio of products, it can gain an edge over smaller rivals when selling to other companies. Which of the following strategies has Omega Inc. most likely used?

Accepted Answer

A)  Chaining 
B)  Franchising 
C)  Horizontal merger 
D)  Niche strategy 
E)  Divestment strategy

Question 18

What are the factors that cause the variation in market growth rates for different products? Evaluate whether these factors result in accelerating or retarding the rate at which a market grows.

Accepted Answer

The answer of What are the factors that cause the...

Question 19

A company pursuing a market development strategy can use the brand name it has developed in one market segment to locate new market segments in which to compete.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following factors of a product tends to accelerate customer demand for it?

Accepted Answer

A)  High observability 
B)  Minimum relative advantage 
C)  High complexity 
D)  Minimal value 
E)  Low trialability

Exam 6: Business-Level Strategy and the Industry Environment

The strategy in a mature industry to invest in infrastructure that would be cost-prohibitive for new entrants to deter new competition from entering the market is known as:

Fragmented industries typically have high barriers to entry.

How can a company take advantage of viral diffusion in a rapidly growing market?

Most embryonic industries emerge from:

The late majority customers are typically reached through specialized distribution channels, and products are often sold by word of mouth.

The goal for a company in the growth stage of the industry life cycle is to maintain its relative competitive position in a rapidly expanding market.

Which of the following statements about customer categories in growing industries is true?

Which of the following is NOT an example of a fragmented industry?

Intensifying competition in a declining industry is dependent on which four factors? Explain how these factors are considered when a company chooses a strategy in a declining industry.

Market penetration involves the creation of new or improved products to replace existing products.

A company uses which of the following when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability?

The strategy that company should pursue for the first group of customers to enter the market for a new product

To compete in the fragmented restaurant industry, Starbucks built, and now operates, hundreds of restaurants across the United States and Canada. Which of the following strategies is Starbucks using?

Which of the following is a disadvantage of franchising?

Explicit price leadership, when companies jointly set prices, is illegal under antitrust laws.

What are the factors that cause the variation in market growth rates for different products? Evaluate whether these factors result in accelerating or retarding the rate at which a market grows.

A company pursuing a market development strategy can use the brand name it has developed in one market segment to locate new market segments in which to compete.

Which of the following factors of a product tends to accelerate customer demand for it?