Question 1

Franchising is a business-level strategy that allows companies to

Accepted Answer

The answer of Franchising is a business-level strategy that allows...

Question 2

An embryonic industry is one that

Accepted Answer

An embryonic industry is one that is just beginning to develop. It is in the early stages of development and has not yet reached maturity or established itself in the market.

Question 3

Firms sometimes pursue a chaining strategy to

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The answer of Firms sometimes pursue a chaining strategy to
...

Question 4

Amazon.com and eBay are examples of companies that

Accepted Answer

Both Amazon.com and eBay used the Internet to increase retail sales, employed technology to consolidate what had previously been a fragmented industry, and pursued a cost-leadership model. Therefore, all the choices are correct.

Question 5

By failing to adapt to their customers' changing demographics,needs and preferences,and continuing a "if it's not broken,don't fix it" strategy,Mattel's Barbie doll line lost significant market share to MGA's Bratz doll line,eventually leading to a costly lawsuit.

Accepted Answer

The statement accurately describes the situation with Mattel's Barbie doll line losing market share to MGA's Bratz doll line due to a lack of adaptation to changing customer demographics, needs, and preferences. The costly lawsuit refers to the legal battle between Mattel and MGA over the ownership of the Bratz brand.

Question 6

In the embryonic stage of the industry life cycle,a company's investment needs are low because the market is generally quite small.

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The answer of In the embryonic stage of the industry...

Question 7

A new product's relative advantage refers to the degree to which a new product is perceived as better at satisfying customer needs than the product that it supersedes.

Accepted Answer

This statement is true. The relative advantage is a key aspect of the perceived value of a new product compared to the previous product in the market. It determines whether customers will be willing to adopt the new product or stick to the old one.

Question 8

A horizontal merger is a

Accepted Answer

A horizontal merger is a type of merger where companies operating in the same industry come together to form a larger entity. This type of merger is aimed at achieving economies of scale, reducing costs, and increasing market share. It allows the merged companies to expand their product offerings, increase their customer base, and strengthen their position in the market. Examples of horizontal mergers include the merger of AT&T and Time Warner, and the merger of Dow Chemical and DuPont.

Question 9

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

Accepted Answer

Market penetration involves increasing market share and sales of existing products through tactics such as pricing strategies, promotions, and advertising, rather than creating new or improved products to replace existing ones.

Question 10

Most embryonic industries arise from

Accepted Answer

Embryonic industries typically arise from a technological breakthrough, which can lead to the development of new products and services. This breakthrough could come from research and development programs conducted by universities, government organizations, or private companies, or it could result from serendipitous discoveries made by individuals or small teams of researchers. However, the key factor is usually the technology itself, rather than external factors such as patents or government research.

Question 11

A price-cutting strategy will keep out an entrant that plans to adopt a new production technology.

Accepted Answer

A price-cutting strategy may not necessarily deter an entrant that plans to adopt a new production technology, as the entrant may be able to produce at a lower cost and still remain competitive despite the price cuts. Additionally, relying solely on price-cutting as a defensive strategy can lead to a race to the bottom and reduced profitability for all players in the market.

Question 12

Which of the following is not a characteristic of a fragmented industry?

Accepted Answer

Fragmented industries are typically characterized by low barriers to entry, constant entry of new competitors, and specialized customer needs. Diseconomies of scale may also be present, as firms are often small and lack the resources to take advantage of economies of scale. However, high barriers to exit would be more characteristic of a consolidated industry, where the few firms that dominate the market have significant competitive advantages over new entrants, making it difficult for them to exit the industry.

Question 13

Market development finds new market segments for a company's products.

Accepted Answer

Market development involves finding new market segments for a company's products or services. This can include geographical expansion or targeting new demographics or customer groups.

Question 14

A fragmented industry is one composed of a

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The answer of A fragmented industry is one composed of...

Question 15

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

Accepted Answer

A divestment strategy involves selling off assets or business units. The success of this strategy depends on many factors, including the timing of the sale. If the assets or business units are sold at the right time, a company can maximize its returns and minimize losses. Therefore, timing is critical to the success of a divestment strategy.

Question 16

By their choices of competitive actions and decisions about product attributes,managers can speed up or slow down the rate of progress of an industry through the stages of the industry life cycle.

Accepted Answer

Managers have significant influence over the rate of progress of an industry by their actions and decisions related to competition and product attributes. They can choose to introduce innovative products and aggressive marketing strategies that accelerate industry growth, or they can refrain from investing in research and development and pursue a conservative pricing strategy that slows down industry progress. Therefore, their choices can impact the trajectory of an industry as it moves through the different stages of the life cycle.

Question 17

Product proliferation refers to the strategy of filling the niches by catering to the needs of customers in all market segments.

Accepted Answer

Product proliferation means offering a large number of products to meet the diverse needs of customers in different market segments.

Question 18

As the supermarket industry began to grow with the opening hundreds of new stores,supermarkets were able to

Accepted Answer

With the opening of hundreds of new stores, supermarkets were able to capture economies of scale that were not previously available. This allowed them to purchase goods in larger quantities at lower prices, which ultimately increased profitability. Option B is incorrect as monopolizing new markets would be against antitrust laws. Option C is incorrect as increasing costs would decrease profitability. Option D is incorrect as supermarkets would purchase from vendors in larger quantities to take advantage of economies of scale.

Question 19

A leadership strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.

Accepted Answer

This is a valid leadership strategy known as consolidation. It involves acquiring the market share of companies that are either leaving the industry or are struggling to survive. By doing so, the company can gain a larger market share and potentially become a dominant player in the industry. However, it is important to note that this strategy requires careful analysis and consideration of the acquired companies' assets and liabilities to ensure that the consolidation is a viable and profitable move.

Question 20

The goal for companies in the growth stage of the industry life cycle is to avoid falling too far behind industry leaders.

Accepted Answer

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Quiz 6: Business-Level Strategy and the Industry Environment