Question 1

To compete in the fragmented restaurant industry,Red Lobster Corporation built and now operates hundreds of stores across the United States and Canada.Red Lobster is using which type of strategy?
A)Acquisitions
B)Horizontal mergers
C)Franchising
D)Diversification
E)Chaining

Accepted Answer

Red Lobster's strategy of building and operating hundreds of stores across the United States and Canada is known as chaining, which involves opening multiple stores in different locations to increase market share and brand recognition. This type of strategy is commonly used in the restaurant industry to compete with other fragmented players.

Question 2

Which of the following strategies for fragmented industries grants the right to use the parent's name,reputation,and business model in a particular location or area in return for a fee and often a percentage of the profits?
A)Chaining
B)Horizontal merger
C)Vertical merger
D)Franchising
E)B2B

Accepted Answer

Franchising is the strategy that grants the right to use the parent's name, reputation, and business model in a particular location or area in return for a fee and often a percentage of the profits. Chaining refers to a company owning multiple outlets or locations. Horizontal and vertical mergers involve combining with other companies in the industry, and B2B refers to business-to-business transactions.

Question 3

At the growth stage of an emergency market,
A)ongoing technological progress makes a product easier to use.
B)key complementary products are developed.
C)companies in the industry find ways to reduce costs.
D)demand for the product increases.
E)all of these choices.

Accepted Answer

At the growth stage of an emergency market, all of the choices listed (ongoing technological progress, development of key complementary products, reduction of costs, and increasing demand) occur simultaneously or sequentially, contributing to the growth of the market.

Question 4

Which of the following factors tends to accelerate customer demand for a product?
A)The product's relative advantage
B)The product's compatibility
C)The simplicity of the product's use
D)The degree to which a product can be experimented with
E)All of these choices

Accepted Answer

All of these factors tend to accelerate customer demand for a product. The product's relative advantage (such as offering unique benefits or solving a problem better than other options) makes it more desirable to customers. Compatibility (compatibility with existing tools, systems or practices) makes it easier for customers to adopt the product. The simplicity of a product's use (ease of use, convenience) increases the likelihood of customer adoption. Lastly, the degree to which a product can be experimented with (allowing customers to try out the product or customize it to their preferences) can increase customer interest and demand.

Question 5

In some situations,pricing strategies can be used to
A)deter entry by other companies.
B)create exit barriers.
C)create emotional attachment to a product.
D)all of these choices.
E)none of these choices.

Accepted Answer

The answer of In some situations,pricing strategies can be used...

Question 6

Factors leading to the slow growth of demand in embryonic industries include all of the following except the
A)poor quality of the first products.
B)lack of complementary products.
C)lack of venture capital for innovative products.
D)high production costs of the products.
E)lack of distribution channels for the products.

Accepted Answer

The lack of venture capital for innovative products can contribute to slow growth in embryonic industries, but poor quality of products, lack of complementary products, high production costs, and lack of distribution channels are all factors that can also slow demand in these industries.

Question 7

Which of the following best describes an industry that consists of many small firms?
A)Mature
B)Growth
C)Fragmented
D)Declining
E)Diverse

Accepted Answer

A fragmented industry is one where there are many small firms operating within it, none of which has a large market share. This is in contrast to a consolidated industry, where there are only a few large firms dominating the market.

Question 8

The growth stage of a product's life cycle is the
A)time when companies attempt to secure their grip over customers in existing market segments.
B)best time to explore horizontal merger opportunities.
C)time to plan an exit strategy.
D)opportunity to reduce investment in a product.
E)opportune moment to reduce advertising expenditures.

Accepted Answer

The growth stage of a product's life cycle is when companies try to establish themselves as market leaders by increasing market share and enhancing the product's features to attract loyal customers. It is a time to invest in marketing and advertising to attract new customers and increase brand awareness. Therefore, option A is the correct answer.

Question 9

Which of the following is a true statement?
A)All new markets develop at about the same rate.
B)Market growth rates are getting shorter over time.
C)Companies cannot do much to affect a market growth rate.
D)The major influence on market growth rates is government regulation.
E)Market growth is typically a smooth,unbroken,upward-climbing S-shape.

Accepted Answer

Market growth rates are influenced by a variety of factors such as technology, competition, and consumer behavior. However, in recent years, the pace of technological advancements and the increased access to information have accelerated the pace of market growth, leading to shorter growth rates.

Question 10

Which of the following customer groups represents the leading wave or edge of the mass market?
A)Early adopters
B)Early majority
C)Innovators
D)Late majority
E)Laggards

Accepted Answer

The answer of Which of the following customer groups represents...

Question 11

Which of the following customer groups is not very price sensitive?
A)Early adopters
B)Early majority
C)Innovators
D)Early adopters and early majority
E)Early adopters,early majority,and innovators

Accepted Answer

Innovators are not very price sensitive as they are willing to pay a premium price for new and innovative products. They are motivated more by the novelty and uniqueness of a product than by its price. Early adopters and early majority are moderately price sensitive and may require more persuasion before purchasing a product at a higher price.

Question 12

In general,different markets
A)develop at similar rates.
B)develop at different rates.
C)develop at lower than anticipated rates.
D)develop at higher than anticipated rates.
E)none of these choices.

Accepted Answer

Markets can develop at different rates based on various factors such as the level of competition, consumer demand, economic conditions, and government regulations. Therefore, it is unlikely that all markets will develop at similar rates.

Question 13

In a harvest strategy,a company
A)limits its investment in a business.
B)decreases its investment in a business.
C)reduces to a minimum the assets it uses in a business.
D)extracts as much investment or profit from the business as it can.
E)all of these choices.

Accepted Answer

A harvest strategy involves limiting and decreasing investment, reducing assets, and extracting maximum profit from a business, thus encompassing all the given choices.

Question 14

Consumer demand for products of an embryonic industry is
A)high and ready to explode.
B)frequently limited at first.
C)nonexistent because consumers lack product information.
D)tentative for the first two years.
E)insatiable.

Accepted Answer

When a new industry emerges, consumer demand is often limited at first because consumers may not be familiar with the product or may be hesitant to try something new. As the industry grows and gains more visibility, demand may increase.

Question 15

Customers who have a practical interest in using a new technology in the future and who are willing to experiment and envision new uses for the technology are called
A)early adopters.
B)the early majority.
C)innovators.
D)laggards.
E)the late majority.

Accepted Answer

The answer of Customers who have a practical interest in...

Question 16

Firms in fragmented industries most often follow which generic strategy?
A)Differentiation
B)Cost leadership
C)Focused low cost
D)Stuck in the middle
E)Focused differentiation

Accepted Answer

Firms in fragmented industries typically have numerous small competitors, making it challenging to gain a competitive advantage based on price or quality. Therefore, a focused differentiation strategy, which targets a specific market niche with unique, high-quality products or services, is often the best approach.

Question 17

The first group of customers to enter the market for a new product are called
A)early adopters.
B)first users.
C)innovators.
D)adventurers.
E)initial customers.

Accepted Answer

Innovators are the first group of customers to adopt a new product. They are characterized by their willingness to take risks and try out new technologies before most others. They typically comprise about 2.5% of the market.

Question 18

Which of the following is not a characteristic of fragmented industries?
A)A large number of small competitors
B)Low economies of scale
C)Many custom-made or specialty firms
D)High barriers to entry
E)Low consolidation

Accepted Answer

High barriers to entry are not a characteristic of fragmented industries. Fragmented industries are typically characterized by a large number of small competitors, low economies of scale, many custom-made or specialty firms, and low consolidation. High barriers to entry are more commonly associated with consolidated industries.

Question 19

One strategy used to consolidate fragmented industries is
A)vertical mergers.
B)chaining.
C)product proliferation.
D)price signaling.
E)nonprice competition.

Accepted Answer

The answer of One strategy used to consolidate fragmented industries...

Question 20

There are many real estate offices in most locations.Some of them are small independent firms; some are larger and affiliated with national chains.Thus,the real estate sales industry is
A)fragmented.
B)vertically integrated.
C)homogeneous.
D)mature.
E)embryonic.

Accepted Answer

The fact that there are many small independent firms and larger national chains means that the industry is not vertically integrated or homogeneous. It is also not embryonic or immature as it is an established industry. Therefore, the best choice is fragmented.

Quiz 6: Business-Level Strategy and the Industry Environment

To compete in the fragmented restaurant industry,Red Lobster Corporation built and now operates hundreds of stores across the United States and Canada.Red Lobster is using which type of strategy?

Which of the following strategies for fragmented industries grants the right to use the parent's name,reputation,and business model in a particular location or area in return for a fee and often a percentage of the profits?

At the growth stage of an emergency market,

Which of the following factors tends to accelerate customer demand for a product?

In some situations,pricing strategies can be used to

Factors leading to the slow growth of demand in embryonic industries include all of the following except the

Which of the following best describes an industry that consists of many small firms?

The growth stage of a product's life cycle is the

Which of the following is a true statement?

Which of the following customer groups represents the leading wave or edge of the mass market?

Which of the following customer groups is not very price sensitive?

In general,different markets

In a harvest strategy,a company

Consumer demand for products of an embryonic industry is

Customers who have a practical interest in using a new technology in the future and who are willing to experiment and envision new uses for the technology are called

Firms in fragmented industries most often follow which generic strategy?

The first group of customers to enter the market for a new product are called

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

One strategy used to consolidate fragmented industries is

There are many real estate offices in most locations.Some of them are small independent firms; some are larger and affiliated with national chains.Thus,the real estate sales industry is