Question 1

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?

Accepted Answer

The answer of In his book Crossing the Chasm, Geoffrey...

Question 2

The highest market demand and industry profits arise when:

Accepted Answer

The highest market demand and industry profits typically occur when early and late majority users enter the market, as these groups represent the largest segments of consumers. Innovators and early adopters help establish the market, but the majority phases are where widespread adoption occurs, driving up demand and profits.

Question 3

The intensity of competition is greater in declining industries in which:

Accepted Answer

In declining industries, exit barriers are typically high, which means that firms are reluctant to leave the industry even if they are operating at a loss. This results in a higher number of competing firms, which increases the intensity of competition.

Question 4

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

Divestment is the strategy of selling or disposing of a company’s assets, such as a subsidiary or business unit, to another company. This allows the company to exit an industry, focus on core competencies, and raise capital. Market penetration, niche, downsizing, and outsourcing all refer to different strategies, but they do not involve selling or disposing of business assets to exit an industry.

Question 5

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?

Accepted Answer

Chaining is a strategy used to achieve cost leadership by establishing a network of linked outlets, which is not applicable to declining industries like music CDs and newspapers.

Question 6

An app development firm is working on a new product to identify and consolidate a smartphone user's favorite and most-used apps into one place on the phone. If the new product will be sold to existing customers, the firm is pursuing a strategy of:

Accepted Answer

The firm is creating a new product for its existing customer base, which aligns with a product development strategy.

Question 7

When dealing with a declining industry, which of the following strategies should be used if a company has distinctive strengths that allow it to capture market share or if the speed of decline and the intensity of competition is moderate?

Accepted Answer

Leadership is the correct strategy when a company has distinctive strengths that allow it to capture market share, especially in a declining industry with moderate speed of decline and competition intensity. This approach involves leveraging the company's strengths to assert dominance and potentially increase market share even as the overall industry shrinks.

Question 8

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

Accepted Answer

Product proliferation uses new marketing segments and new products, which is a non-price competitive strategy based on product differentiation.

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

Which of the following statements about declining industries is true?

Accepted Answer

Not all segments of an industry typically decline at the same rate. This means that some segments may decline faster than others and may present opportunities for companies that can adapt and cater to those specific segments.

Question 11

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

Accepted Answer

The answer of Which of the following factors in an...

Question 12

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?

Accepted Answer

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Question 13

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

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Question 14

Mature industries generally adopt all of the following strategies and tactics EXCEPT:

Accepted Answer

Increasing the level of rivalry within an industry is not a typical strategy for mature industries as they typically seek to moderate the intensity of competition and preserve profitability for all companies in the industry.

Question 15

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?

Accepted Answer

The drawback described in the question is associated with Price leadership, as it involves allowing companies with high cost structures to survive in the market by setting the price standard. This may be disadvantageous in the long term as these companies are not inclined to implement efficiency strategies, which could leave them vulnerable to competitors offering similar products or services at lower prices.

Question 16

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

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Question 17

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

Accepted Answer

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Question 18

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

Gadgetbug's introduction of its own range of uniquely designed gadgets indicates product proliferation, which is a strategy of introducing new variations of a product to cater to different customer segments and stay ahead of the competition.

Question 19

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

The harvest strategy 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. This strategy is often used when a company wants to exit a market or business and maximize its profits before doing so.

Question 20

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

The focus of Nutrimax Corp.'s advertising campaigns on the features and benefits of its existing products suggests that the company is using a market penetration strategy. This strategy involves increasing market share for existing products in existing markets through aggressive marketing efforts. By highlighting the unique features of their products, Nutrimax Corp. is likely trying to convince customers who are already in the market for breakfast cereals to choose their brand over competitors. Product development involves creating new products for existing markets, while product proliferation involves adding new product lines to the company's portfolio. Market development involves expanding into new markets, and capacity control involves managing production capacity. None of these strategies are indicated by the company's marketing efforts as described in the scenario.

Quiz 6: Business-Level Strategy and the Industry Environment