Question 1

Which of the following is true of the maturity phase of an industry?

Accepted Answer

The maturity phase of an industry is characterized by stability, but this stability is fragile and threatened by both internal and external factors. The industry must adapt to new technology, changing customer preferences, and increased competition to maintain its stability. Options A, C, and D are not accurate descriptions of the maturity phase.

Question 2

During a _____,the growth rate in a product-market declines and weaker businesses fail,withdraw from the industry,or are acquired by other companies.

Accepted Answer

A shakeout is a stage in the industry life cycle where the growth rate in a product-market declines and weaker businesses fail, withdraw from the industry, or are acquired by other companies. The shakeout is characterized by fierce competition, pricing pressure, and consolidation. Harvest stage refers to a stage where the focus is on maximizing profits from the product-market. Market penetration refers to a strategy for increasing market share in an existing product-market. Functional performance is a measure of how well a product or service satisfies the functional requirements or specifications.

Question 3

Conditions of demand help determine the strategic attractiveness of declining product markets.

Accepted Answer

Conditions of demand, such as changes in consumer preferences or purchasing power, can impact the demand for a product in a declining market. Understanding these conditions can help a company determine whether it is worth investing in the market or if it is better to exit the market altogether. Therefore, conditions of demand can help determine the strategic attractiveness of declining product markets.

Question 4

Harper Corporation,an electronics manufacturer,emphasizes that its products such as refrigerators,washing machines,and microwave ovens last for a very long time without any problems.Which of the following dimensions of product quality is being emphasized by the organization?

Accepted Answer

Durability refers to the ability of a product to last for a long time without any problems, which is the aspect emphasized by Harper Corporation.

Question 5

Which of the following is a consequence of businesses pursuing low-cost strategies?

Accepted Answer

Low-cost strategies often involve minimizing investments to maintain low operational costs.

Question 6

An extended use strategy is appropriate for an industry's share leader because such firms can more likely gain and retain a substantial share of new customers than smaller firms with less-well-known brands.

Accepted Answer

An extended use strategy involves encouraging current customers to use the product/service more often and attracting new customers by highlighting the benefits of increased usage. Share leaders, with their larger customer base and brand recognition, are more likely to successfully implement this strategy and gain/retain new customers. Smaller firms with less well-known brands may struggle to compete in this way.

Question 7

In a fragmented and heterogeneous market where some segments are less well developed than others,a market expansion strategy may generate substantial additional volume growth.

Accepted Answer

A market expansion strategy aims to increase the market share of a company by identifying and targeting new segments or markets. In a fragmented and heterogeneous market, there may be untapped segments with high growth potential that can be targeted through a market expansion strategy. By reaching these new segments, a company can generate substantial volume growth even if some segments are less well-developed than others. Therefore, the statement is true.

Question 8

A niche strategy can be particularly effective when the target segment is too small to appeal to larger competitors or when the smaller firm can establish a strong differential advantage or brand preference in the segment.

Accepted Answer

This statement is true. Niche strategies are often used by smaller firms to target a specific segment that may not be large enough to attract larger competitors. By establishing a strong differential advantage or brand preference in the segment, the smaller firm can be very effective in serving the needs of this specific market.

Question 9

Which of the following will help analyzers and defenders to sustain a competitive advantage in established product-markets?

Accepted Answer

A low-cost position is a sustainable competitive advantage because it enables the company to offer lower prices than competitors without sacrificing profitability. This attracts price-sensitive customers and makes it difficult for competitors to match the lower prices. Low product differentiation and high market segmentation make it easier for competitors to enter the market and win customers, while high product substitution means that customers can easily switch to similar products from competitors.

Question 10

The lower the exit barriers,the less hospitable a product-market will be during the decline phase of its life cycle.

Accepted Answer

Lower exit barriers make it easier for companies to leave a declining market, reducing competition and potentially making it more hospitable for the remaining firms.

Question 11

For consumer products,firms send technical advisories about new applications to the salesforce to present to their customers during regular sales calls.

Accepted Answer

The answer of For consumer products,firms send technical advisories about...

Question 12

Which of the following is true of analyzer and defender strategies?

Accepted Answer

The answer of Which of the following is true of...

Question 13

Which of the following is a primary marketing objective of all competitors in mature markets?

Accepted Answer

In mature markets, the primary marketing objective of all competitors is to hold onto their existing customers. This is because the market is saturated and customers are already aware of the existing brands and products. Therefore, retaining existing customers becomes crucial for sustaining the business and maintaining market share. While acquisition of competing brands, high investments in R&D, and development of new products can also be important objectives, holding onto existing customers is the most critical objective in mature markets.

Question 14

A harvesting strategy essentially involves additional investment in the business,increased marketing expenses,and in some cases,raising prices.

Accepted Answer

A harvesting strategy typically involves reducing the investment in a business, cutting down on marketing expenses, and often lowering prices or keeping them stable to maximize short-term profits and cash flow as the business winds down or prepares for a sale.

Question 15

When markets become more fragmented as they grow and mature,share leaders have to contract their product lines,or remove one or more flanker brands,to protect their position against competitive inroads.

Accepted Answer

As markets grow and mature, share leaders often expand their product lines or add flanker brands to address different customer segments and needs, thereby protecting and enhancing their market position against competitive inroads.

Question 16

Market maturity is defined by a flattening of the growth rate.

Accepted Answer

Market maturity occurs when the growth rate of a market begins to slow down and flatten out, as the market reaches its saturation point. Therefore, the statement is true.

Question 17

Defender strategies work best in industries:

Accepted Answer

Defender strategies are effective in industries with stable environments and less complex technology, allowing firms to focus on efficiency and maintaining their market position.

Question 18

In a mature market,domestic geographic expansion is often viable.

Accepted Answer

In a mature market, opportunities for domestic geographic expansion are typically limited due to market saturation, making it difficult for companies to find new areas for growth within the country.

Question 19

Which of the following strategies may be appropriate for units with a leading,or at least a profitable,share of one or more major segments in a mature industry?

Accepted Answer

Analyzer strategy is appropriate for units with a leading share in mature industries as they need to maintain their position while also exploring new opportunities. By analyzing the market trends and competitors' strategies, they can make strategic decisions. Defending the current market share also becomes crucial in a mature industry as competitors actively try to take over the share with lower prices or new products. Therefore, the analyzer and defender strategy would be the best choice for such units.

Question 20

_____ is most appropriate for developed industries that are still experiencing some technological change and may have opportunities for continued growth.

Accepted Answer

The analyzer strategy is most appropriate for developed industries that are experiencing some technological change and still have growth opportunities. This strategy balances the strengths of both the prospector and defender strategies, allowing for exploration of new opportunities while also maintaining stability in current operations.

Quiz 16: Strategies for Mature and Declining Markets