MINI-CASE
Coller Inc.is an American firm that manufactures flat panel LCD computer monitors.The firm has a 5% share of a 2 million unit market.The firm's marketing department calculates that its acquisition cost is $13 million and retention costs is $5 million.The market for flat panel LCD computer monitors is in the late growth stage of the product life cycle,and Coller currently sells its product for $2,000 and experiences variable costs per unit of $1,600.
-Mini-Case Question.Coller Inc. ,because of a weak competitive advantage,is unable to produce desired levels of performance,and considers using a strategic market plan that allows it to exit the market slowly.The firm decides to improve its short-run performance by reducing marketing and sales expenses and systematically raising prices.In this example,Coller Inc.is most likely to be using which of the following defensive core strategies?

Question

Quizplus · Accepted Answer

Coller Inc.'s strategy of reducing marketing and sales expenses and systematically raising prices is aimed at maximizing its cash flow from the current product line without continuing to invest in it. This indicates that the firm is using a harvest for cash flow strategy, which involves maximizing short-term cash flow from a product line with a limited future by reducing investment and/or increasing prices. Therefore, option C is the correct choice.

MINI-CASE Coller Inc.is an American Firm That Manufactures Flat Panel LCD