Question 1

If employees are involved in the decision-making process,they are more motivated to implement the decided course of action.

Accepted Answer

When employees are involved in decision-making, they feel empowered and invested in the outcome, which leads to increased motivation and commitment to implementing the chosen course of action.

Question 2

When a manufacturer buys a chain of retail stores that carry its products,it is an example of backward integration.

Accepted Answer

This is an example of forward integration, as the manufacturer is moving closer to the end consumer by acquiring retail outlets. Backward integration would involve acquiring suppliers or producers of raw materials.

Question 3

If employees are spread too thin because of growth,the firm will face problems of employee morale and increased employee turn over.

Accepted Answer

When employees are spread too thin due to growth, they may become overworked and stressed, leading to decreased morale and an increased likelihood of leaving the company.

Question 4

Forward integration occurs when the firm acquires one of its suppliers.

Accepted Answer

Forward integration occurs when a firm acquires or merges with a company that is closer to the final consumer in the supply chain, such as a distributor or retailer, not a supplier. Acquiring a supplier is known as backward integration.

Question 5

The value-added chain is usually available only to large national firms.

Accepted Answer

The value-added chain can be accessed by firms of any size, not just large national firms. Small and medium-sized enterprises can also benefit from identifying and leveraging different stages of the value chain.

Question 6

Employee turnover for part-time workers is lower than that for full-time workers.

Accepted Answer

This statement is actually false. Studies have shown that part-time employees have a higher turnover rate than full-time employees. This could be due to a lack of benefits and job security, as part-time workers are typically not entitled to the same benefits and protections as full-time workers.

Question 7

Horizontal integration occurs at the same level of the value-added chain but simply involves a different,but complementary,value-added chain.

Accepted Answer

Horizontal integration involves combining companies or businesses that operate at the same level of the value-added chain, but with different, yet complementary, value-added chains. Therefore, the statement is true.

Question 8

One of the most successful diversification strategies is to diversify into unrelated products or unrelated markets to spread the risk.

Accepted Answer

Diversifying into unrelated products or markets can spread risk but is often less successful than related diversification because it may stretch resources too thin and the company may lack expertise in the new areas. Related diversification, where the new products or markets are connected to the company's existing operations, tends to leverage core competencies and is generally seen as a more effective strategy.

Question 9

As a firm grows,higher volume increases production efficiency and increases its bargaining power with suppliers.

Accepted Answer

This statement is true. Higher volume typically leads to economies of scale and can result in lower costs per unit, thus improving production efficiency. Additionally, larger firms have more bargaining power with suppliers as they are able to purchase larger quantities and negotiate better terms.

Question 10

The source of knowledge about the unmet demand for an energy bar (PowerBar)came from extensive market research of athletes.

Accepted Answer

The answer of The source of knowledge about the unmet...

Question 11

When a retail tire store buys a tire wholesaler this is an example of horizontal integration.

Accepted Answer

Horizontal integration involves the merging or acquisition of companies that operate in the same industry and at the same level of the supply chain. In this case, a tire store and a tire wholesaler operate at different levels of the supply chain, so this is an example of vertical integration.

Question 12

Market development strategies involve selling the firm's existing products to a new group of customers,such as a new geographic market.

Accepted Answer

Market development strategy involves expanding the market by selling the firm's existing products to a new group of customers such as entering a new geographical market.

Question 13

Product development strategies use customers' experiences to develop new products for existing customers.

Accepted Answer

Product development strategies often involve collecting feedback from existing customers to develop new products or improve existing ones to meet their needs and preferences.

Question 14

Most new ventures need a human resource department from the first day of operations.

Accepted Answer

Most new ventures do not require a human resource department from the first day of operations as they may not have enough employees or resources to justify a full HR department. The founder or a small team can often handle HR duties until the company grows and requires a dedicated HR team.

Question 15

A product development strategy relies on taking market share from competitors.

Accepted Answer

A product development strategy focuses on creating and launching new products or improving existing ones to better meet customer needs and preferences. It is not necessarily focused on taking market share from competitors, although this may be a potential outcome if the new or improved product is more appealing to customers than options offered by competitors.

Question 16

To prevent pressures on the financial resources created by growth,the venture should avoid resource slack.

Accepted Answer

Resource slack can actually be beneficial for a venture, especially in its growth phases, as it provides a buffer that allows the company to absorb unforeseen expenses or invest in new opportunities without jeopardizing its financial stability.

Question 17

Using a penetration strategy,the entrepreneur attempts to encourage existing customers to buy more of the firm's current products.

Accepted Answer

A penetration strategy typically involves increasing sales to existing customers by offering promotions or incentives to encourage them to buy more of the same product.

Question 18

Many entrepreneurs find that as they grow they need to change their management style.

Accepted Answer

As businesses grow and evolve, entrepreneurs often need to adapt their management style to better fit the needs of their organization. What worked in the early stages of a company might not be as effective in later stages when there are more employees, departments, and operations to oversee. Successful leaders are able to recognize these changes and adjust their management style accordingly.

Question 19

If the existing product is being sold to teenagers in one country and new entry involves selling the existing product to teenagers in a new country then this represents a new product use.

Accepted Answer

Selling the existing product to a new target market, i.e. teenagers in a new country, does not represent a new product use but rather a new market opportunity.

Question 20

Forward integration is taking a step back on the value chain toward the raw materials.

Accepted Answer

Forward integration is a strategy of moving forward in the value chain towards the end-product or customer. Taking a step back towards the raw materials is referred to as backward integration.

Quiz 13: Strategies for Growth and Managing the Implication of Growth