Question 1

Some researchers claim that the spread of new products is similar to a viral infection,suggesting that

Accepted Answer

The statement suggests that the spread of new products is similar to a viral infection, meaning that it spreads from person to person like a virus. Lead adopters, who are the first to try out new products, become "infected" or enthused with the new product and subsequently infect others by telling them about it, just as viral infections spread from one person to another. Therefore, option D is the best choice.

Question 2

Which of the following factors that affect market growth rates refers to the degree to which a new product is perceived as better at satisfying customer needs than the product it supersedes?

Accepted Answer

Relative advantage refers to the degree to which a new product is perceived as better at satisfying customer needs than the product it supersedes.

Question 3

Which of the following factors that affect market growth rates refers to the degree to which a new product is perceived as difficult to understand and use?

Accepted Answer

Complexity refers to the degree to which a new product is perceived as difficult to understand and use. The more complex a product is, the slower its rate of adoption and market growth will be.

Question 4

In which stage of the industry life cycle do both cost leaders and differentiators adopt a hold-and-maintain strategy to defend their business models and ward off threats from focused companies that might be appearing?

Accepted Answer

In the mature stage of the industry life cycle, the competition is intense, and the market is saturated, making it difficult for new entrants to gain a foothold. Both cost leaders and differentiators adopt a hold-and-maintain strategy to defend their business models and ward off threats from focused companies that might be appearing. This is because they have already established a strong market position and brand reputation, making it easier for them to maintain their market share rather than trying to expand it further.

Question 5

By the shakeout stage of a product's life cycle,demand is

Accepted Answer

The answer of By the shakeout stage of a product's...

Question 6

Which of the following shakeout strategies requires a company to limit or decrease its investment in a business and to extract,or milk,the investment as much as it can?

Accepted Answer

The harvest strategy involves limiting or decreasing investment in a business and extracting as much value as possible from the investment through methods such as cost-cutting, selling off assets, and reducing marketing expenditures. This strategy is also commonly referred to as a "milking" strategy.

Question 7

A telecommunications firm is working on the next generation of switching equipment that allows calls to be digitally transmitted from sender to receiver.If the new product will be sold to existing customers,the firm is pursuing a strategy of

Accepted Answer

The answer of A telecommunications firm is working on the...

Question 8

Which of the following factors that affect market growth rates refers to the degree to which the results of using and enjoying a new product can be seen and appreciated by other people?

Accepted Answer

Observability refers to the degree to which the results of using and enjoying a new product can be seen and appreciated by other people. It can significantly affect the market growth rates because people tend to adopt products that they can show off to others or that others can see and admire.

Question 9

Which of the following strategies helps companies with high cost structures,allowing them to survive without having to implement strategies to become more productive and efficient?

Accepted Answer

Implementing a price leadership strategy helps companies with high cost structures to survive without having to become more productive and efficient. A price leader sets the price for the industry, allowing other companies to follow suit. This way, even if the cost structure of the company is high, they can still maintain profitability by setting a price that covers their costs while not losing market share.

Question 10

A company can achieve a leadership position in a declining industry by

Accepted Answer

Pursuing horizontal mergers can help a company consolidate its position and achieve leadership by acquiring competitors and increasing market share in a declining industry.

Question 11

Product proliferation occurs in which stage of the product life cycle?

Accepted Answer

The answer of Product proliferation occurs in which stage of...

Question 12

In deciding on a strategy,a company in a declining industry must do all of the following except

Accepted Answer

Lowering prices may not be a suitable strategy for a company in a declining industry as it may lead to a price war with competitors, further eroding profits. The other options, managing industry capacity, evaluating strengths relative to remaining demand, evaluating severity of decline, and monitoring cash flow are important considerations when deciding on a strategy in a declining industry.

Question 13

Mature industries are generally characterized by

Accepted Answer

Mature industries typically have a small number of large firms, which have established dominant positions in the market. This is because it becomes difficult for new firms to enter the industry due to the high cost of establishing themselves and competing against well-established players. Additionally, mature industries often have limited potential for economies of scale, meaning that there are fewer advantages for firms that are able to achieve large scale production. Finally, demand in mature industries tends to be relatively stable, as the market is well-established and customers have already formed habits and preferences.

Question 14

Successful companies in a mature industry are most interested in

Accepted Answer

Successful companies in a mature industry are more interested in increasing entry barriers to keep new competitors out and maintain their market share. This could be achieved by various means such as patents, economies of scale, and brand recognition.

Question 15

In embryonic industries,customer demand is typically

Accepted Answer

The answer of In embryonic industries,customer demand is typically
...

Question 16

John,a computer scientist,is willing to pay premium prices to be one of the first to have new versions of software packages.John is in the ____ customer group.

Accepted Answer

The answer of John,a computer scientist,is willing to pay premium...

Question 17

Which of the following strategies allows interdependent firms indirectly to coordinate their actions?

Accepted Answer

Price signaling allows interdependent firms to indirectly coordinate their actions by announcing price changes or promotions, which can signal to other firms how they should adjust their own prices or promotions in response. This can lead to a more efficient outcome for all firms involved.

Question 18

All of the following factors cause excess industry capacity except

Accepted Answer

The answer of All of the following factors cause excess...

Question 19

Which of the following factors is crucial in choosing an investment strategy to pursue and thus maximize the profitability of a company's business model?

Accepted Answer

Both the competitive advantage that a company's business model gives it in an industry relative to competitors and the stage of the industry life cycle are important factors to consider when choosing an investment strategy. Understanding where a company stands in the industry life cycle and what advantages it has over its competitors can help identify potential growth opportunities and maximize profitability. The age of the firm may also be a factor to consider, but it is not as crucial as the other two factors. Therefore, option D is the best choice.

Question 20

Competitive intensity in a declining industry is greatest when

Accepted Answer

The answer of Competitive intensity in a declining industry is...

Quiz 6: Business-Level Strategy and the Industry Environment