Strategic Management Theory An Integrated Approach 11th Edition by Charles W. L. Hill - Test Bank

Strategic Management Theory An Integrated Approach 11th Edition by Charles W. L. Hill – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

1. A fragmented industry is composed of a large number of small and medium-sized companies.
2. True
3. False

 

ANSWER:                             True POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop  to increase profitability in fragmented industries

NATIONAL STANDARDS:   United  States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

2. Fragmented industries typically have high barriers to entry.
3. True
4. False

 

ANSWER:                            False POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop  to increase profitability in fragmented industries

NATIONAL STANDARDS:   United  States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

3. 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.
4. True
5. False

 

ANSWER:                             True POINTS:                               I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop  to increase profitability in fragmented industries

NATIONAL STANDARDS:   United  States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

4. Relish Inc. created the first national chain of fast-food restaurants in a previously fragmented industry. This is called divestment.
5. True
6. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

5. The franchisor typically owns and funds each of its franchisees.
6. True
7. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

6. Alpha corporation owns and controls several retail outlets and is thus pursuing a strategy called franchising.
7. True
8. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

7. Through chaining, companies increase their buying power, which allows them to negotiate large price reductions with their suppliers, which in tum promotes their competitive advantage.
8. True
9. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

8. Franchisees essentially pursue independent strategies and do not use the business model of the franchisor.
9. True
10. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

9. The challenge in a fragmented industry is to figure out the best set of strategies to overcome a fragmented market so that the competitive advantages associated with pursuing one of the different business models can be realized.
10. True
11. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

10. 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.
11. True
12. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

11. One characteristic of embryonic industries is poorly developed distribution channels.
12. True
13. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

12. Development of a mass market is the stimulus for an industry to change from growth to embryonic.
13. True
14. False

 

ANSWER:                             False

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

13. Both innovators and early adopters enter the market while the industry is in its embryonic stage.
14. True
15. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

14. Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.
15. True
16. False

 

ANSWER:                             False

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

15. Different strategies are often required to support and strengthen a company’s business model as a market develops

over time.

1. True
2. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

16. The “late majority” are typically reached through specialized distribution channels, and products are often sold by word of mouth.
17. True
18. False

 

ANSWER:                             False

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

17. Laggards are the customers who are the first ones to try and adopt a new technology.
18. True
19. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

18. Horizontal mergers often lead to industry fragmentation.
19. True
20. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

19. Innovators and early adopters have very different customer needs from the early majority.
20. True
21. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

20. Laggards are technologically sophisticated customers willing to tolerate the limitations of the product.
21. True
22. False

 

ANSWER:                            False

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

21. Formal price leadership, or when companies jointly set prices, is illegal under antitrust laws.
22. True
23. False

 

 

ANSWER: POINTS:

DIFFICULTY:

True

I

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

22. The goal for companies in the growth stage of the industry life cycle is to maintain its relative competitive position in a rapidly expanding market.
23. True
24. False

 

ANSWER:                             True POINTS:                               I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

23. In the embryonic stage of the industry life cycle, a company’s investment needs and production costs are low.
24. True
25. False

 

ANSWER:                            False POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

24. Product proliferation often results in lowering of entry barriers in a mature industry.
25. True
26. False

 

 

ANSWER: POINTS:

DIFFICULTY:

False

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

25. Product proliferation refers to the strategy of filling the niches by catering to the needs of customers in all market segments.
26. True
27. False

 

 

ANSWER: POINTS:

DIFFICULTY:

True

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

26. Market penetration involves the creation of new and innovative products to replace existing ones.
27. True
28. False

 

 

ANSWER: POINTS:

DIFFICULTY:

False

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

27. A limit price strategy involves charging a price that is lower than that required to maximize profits in the short run, but is above the cost structure of potential entrants.
28. True
29. False

 

 

ANSWER: POINTS:

DIFFICULTY:

True

1

Moderate

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

28. Market development strategy involves fmding new market segments for a company’s products.
29. True
30. False

 

 

ANSWER: POINTS:

DIFFICULTY:

True

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

29. A divestment strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.
30. True
31. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

30. A divestment strategy’s success is often dependent upon good timing.
31. True
32. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

31. A harvest strategy requires the company to halt all new investments in capital equipment, advertising, research and development, and so forth.
32. True
33. False

 

ANSWER:                             True

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

32. A fragmented industry is one composed of a:
33. single large company that has the power to determine prices. b. large companies and their subsidiaries.
34. large number of small and medium-sized fmns.
35. companies that operate in different locations across the world. e. a small number of single proprietorships.

 

ANSWER:                             c

POINTS:                               1

DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

33. The real estate industry comprises different kinds of firms in several locations. Some are independent and popular locally while the others are affiliated to national chains. The real estate industry is most likely to be a(n):
34. fragmented industry. b. oligopolies industry.
35. pure competition industry. d. consolidated industry.
36. monopoly.

 

ANSWER:                             a POINTS:                                            I DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

34. Which of the following is not a characteristic of a fragmented industry?
35. Low barriers to entry b. Diseconomies of scale
36. Brand loyalty in the industry that may primarily be local d. Very specialized customer needs
37. Large mass-production operation

 

ANSWER:                             e POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

35. Which of the following statements is true about fragmented industries? a. They are usually characterized by large mass-production operations. b. They essentially enjoy a national brand loyalty.
36. They require companies to use focus strategies because of specialized customer needs.
37. They do not attract new entrants as they have extremely high entry barriers due to economies of scale.
38. They are usually dominated by one or two large companies that enjoy the power to influence industry prices.

 

ANSWER:                             c POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

36. Firms sometimes pursue a chaining strategy to:
37. obtain the advantages of cost leadership. b. create product diversity.
38. generate revenue by licensing the patents it owns. d. spread overhead costs.
39. establish a number of unrelated business units.

 

ANSWER:                             a POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase

profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

37. 3 Which of the following is an advantage of franchising?
38. It gives the franchisor the same level of tight control over franchisees as does chaining. b. It allows the franchisor to obtain the entire profits made by franchisees.
39. It is beneficial for franchisees as they do not have to face the challenge of higher capital costs.
40. It helps the franchisees by relieving them of the responsibility of running operations. e. It can help the franchisor expand his or her business rapidly.

 

ANSWER:                             e POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

38. 3 Which of the following is a disadvantage of franchising?
39. It restricts the franchisor from expanding.
40. It results in the franchisor taking all the financial burden of the franchisees.
41. It results in the delegation of authority to franchisees and thus, the franchisor may not enjoy complete control. d. It does not provide sufficient incentive to the franchisees to run operations effectively as the franchisees are

not entrepreneurs.

1. It requires the franchisees to create a new business model and plan strategies.

 

ANSWER:                             c POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

39. Which of the following statements is true about horizontal mergers?
40. Horizontal mergers result from an intention to achieve economies of scale. b. Horizontal mergers result in the fragmentation of the industry.
41. Horizontal mergers has been a very successful concept so far with zero cases of failure.
42. Companies that establish a network of linked merchandising outlets to obtain advantages of cost leadership are known as horizontal mergers.
43. Companies that adopt the strategy of centralization to gain control over all business units are known as horizontal mergers.

 

ANSWER:                             a POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase

profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

40. To compete in the fragmented restaurant industry, Red Lobster Corporation built, and now operates hundreds of stores across the United States and Canada. Which of the following strategies is Red Lobster using ?
41. Acquisitions
42. Horizontal mergers c. Franchising
43. Licensing e. Chaining

 

ANSWER:                             e POINTS:     I DIFFICULTY:                Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

41. A company uses when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability.
42. acquisition strategy b. chaining
43. divestment strategy d. niche strategy
44. franchising

 

ANSWER:                             d POINTS:                               I DIFFICULTY:                                            Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

42. One strategy used to consolidate fragmented industries is:
43. vertical mergers. b. chaining.
44. product proliferation. d. price signaling.
45. nonprice competition.

 

ANSWER:                            b POINTS:                               I DIFFICULTY:                                            Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.01- Identify the strategies managers can develop to increase profitability in fragmented industries

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

43. In a bid to expand its business and gain cost advantages, Omega  Inc. has established several  merchandising outlets in different locations.  All the outlets share a good network and are interconnected by information technology. The entire network of outlets  operates  in the industry  as one large company. Which of the following strategies has Omega  Inc. most likely used ?
44. Chaining

 

1. Franchising

 

1. Horizontal merger d. Niche strategy
2. Divestment strategy

 

ANSWER:                             a

POINTS:                               1

DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop  to increase profitability in fragmented industries

NATIONAL STANDARDS:   United  States- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Application

 

44. Hydralicious, a juice parlor, has been looking to expand its business. The company has given a few entrepreneurs in different locations the license  to operate  under its name.The entrepreneurs are given the permission to use the company’s reputation and the business  model  to run operations. The entrepreneurs will be charged  a fee but will also get a percentage of the profits made.  Which of the following strategies  is Hydralicious most likely to be using ?
45. Chaining

 

1. Horizontal merger c. Vertical merger
2. Franchising

 

1. Centralization

 

ANSWER:                             d

POINTS:                               1

DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.15.06.01- Identify the strategies managers can develop  to increase profitability in fragmented industries

NATIONAL STANDARDS:   United  States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

45. An embryonic industry is one that:
46. a number of small and medium sized companies. b. is just beginning to develop.
47. has sufficiently developed so that early industry leaders have already been identified. d. has initial government backing because of its importance to the general populace.
48. is characterized by intense rivalry among established companies.

 

ANSWER:                            b POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and

growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

46. Most embryonic industries arise from:
47. a technological breakthrough. b. product proliferation.
48. lack of high entry barriers.
49. chaining.
50. franchising.

 

ANSWER:                             a POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Technology

KEYWORDS:                       Bloom’s: Knowledge

 

47. Which of the following statements is true in the context of embryonic industries?
48. They are characterized by very a high initial customer demand. b. They are characterized by well-developed distribution channels.
49. They involve low production costs because of large volumes of production.
50. They face the challenge of customers not being familiar with product benefits. e. They enjoy the abundance of complementary products that help increase sales.

 

ANSWER:                             d POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

48. An industry moves from embryonic to growth stage when:
49. the sales of complementary products decline. b. the production costs increase.
50. companies manufacture products in very small quantities.
51. ongoing technological progress makes its product easier to use. e. mass markets for its products decline.

 

ANSWER:                             d POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and

growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

49. The first group of customers to enter the market for a new product are called:
50. laggards.
51. late majority.
52. innovators.
53. early majority.
54. passive shoppers.

 

ANSWER:                             c POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

50. Factors leading to the slow growth of demand in embryonic industries include all of the following except the:
51. poor quality of the first products. b. lack of complementary products.
52. customer familiarity with products.
53. high production costs of the products.
54. lack of distribution channels for the products.

 

ANSWER:                             c POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

51. 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:
52. early adopters.
53. the early majority.
54. innovators.
55. laggards.
56. the late majority.

 

ANSWER:                              a POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

52. Which of the following customer groups represents the leading wave or edge of the mass market?
53. Early adopters b. Early majority c. Innovators
54. Late majority e. Laggards

 

ANSWER:                             b POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

53. The growth stage of an industry’s life cycle is the:
54. time when companies attempt to secure their grip over customers in existing market segments. b. time when customers start exiting the markets.
55. time to plan an exit strategy.
56. opportunity to reduce investment in a product.
57. phase when the demand for products is low because of customers not being familiar with the product.

 

ANSWER:                              a POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

54. Which of the following factors of a particular product tends to accelerate customer demand for it?
55. High observability
56. Minimum relative advantage c. High complexity
57. Minimal value
58. Low trialability

 

ANSWER:                              a POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and

growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

55. In a harvest strategy, a company:
56. significantly increases its investment in a business. b. extracts maximum profits from its investments.
57. ventures into new market segments with new products.
58. expands the number of stores or properties.
59. significantly increases advertising expenditure.

 

ANSWER:                             b POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

56. Who among the following is most likely to fall under the category of laggards in the context of customer groups?
57. Martha is tech-savvy and tends to actively seek out for new and innovative products in the market. b. Philip appreciates technology but tends to refrain from trying products that are extremely new.
58. Allan is ignorant about the newest uses of technology and buys new products only when they become an

absolute necessity.

1. Rebecca is aware about the value that technology offers; she tends to weigh costs and benefits of a product before making a buying decision.
2. Arnold tends to be a little apprehensive about buying new technology but buys nevertheless when he observes that a lot of people are using the new technology.

 

ANSWER:                              c POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

57. 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?
58. Complexity
59. Relative advantage c. Compatibility
60. Trialability
61. Observability

 

ANSWER:                             b POINTS:                               I DIFFICULTY:                                            Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

58. 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?
59. Complexity
60. Relative advantage c. Compatibility
61. Trialability
62. Observability

 

ANSWER:                              a POINTS:                               I DIFFICULTY:                                            Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

59. 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?
60. Complexity
61. Relative advantage c. Compatibility
62. Trialability
63. Observability

 

ANSWER:                              e POINTS:                               I DIFFICULTY:                                            Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

60. Which of the following statements is true about customer categories in the context of growing industries?
61. Laggards frequently adopt new products even when the benefits are not obvious. b. Innovators are the customers who are the last ones to adopt a new product.
62. A typical late majority customer group is a behaviorally conservative set of customers.
63. Customers in the early majority generally do not understand the value of new technology. e. Laggards form the leading wave or edge of the mass market.

 

ANSWER:                             c

POINTS:                               1

DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.15.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

61. Which of the following statements is true in the context of growing industries?
62. Innovators and early adopters have the same customer needs as the early majority.
63. Innovators and early adopters are typically reached through specialized distribution channels.
64. Reaching the early majority seldom requires advertising and is usually achieved through word of mouth. d. Companies serving innovators need to have large-scale mass production and very low prices.
65. Companies competing in an embryonic market typically pay more attention to increasing the reliability of a

product than to its performance.

 

 

ANSWER: POINTS:

DIFFICULTY:

b

1

Moderate

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

62. John, a technology enthusiast, is often willing to pay premium prices to be one among those who have new versions of software packages. John most likely belongs to the group of customers.
63. laggard
64. early majority c. early adopter d. late majority e. innovator

 

ANSWER:                             e

POINTS:                               1

DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.15.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

63. Thomas tends to be ignorant about technological advancements. He was reluctant to own a smartphone even when they were well-established and familiar in the market. However, Thomas slowly got used to the idea of a smartphone when his job demanded him to be connected to the office network all the time. Thomas is most likely to fall under which of the following categories of customers?
64. Early majority b. Late majority c. Laggards
65. Early adopters e. Innovators

 

ANSWER:                             c POINTS:                                            I DIFFICULTY:                                            Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

64. Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company recently has been facing some amount of competition from certain new entrants. The new entrants offer gadgets in different colors and with interesting artwork embossed. Recognizing that there is a special market for gadgets that are designed uniquely, Gadgetbug has now introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug’s attempt to cater to all the different segments of customers to deter competition demonstrates:
65. price signaling
66. product proliferation c. harvest strategy
67. limit price strategy
68. diseconomies of scale

 

 

ANSWER: POINTS:

DIFFICULTY:

b

I

Challenging

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

65. 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?
66. Market concentration strategy b. Share-increasing strategy
67. Cost-leadership strategy
68. Hold-and-maintain strategy e. Harvest strategy

 

ANSWER:                             e POINTS:                               I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

66. Highest market demand and industry profits arise when:
67. early adopters leave the market.
68. innovators and early adopters enter the market.
69. when laggards and late majority leave the market. d. early and late majority users enter the market.
70. when the production costs become high.

 

ANSWER:                             d POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

67. Nutrimax Corp., a breakfast cereal company, has designed extensive and elaborate advertising campaigns for its existing products. The campaigns mainly focus on the aspects and benefits of the products that make them better than other products. The massive advertising and marketing initiatives are also intended to intimidate new entrants and rivals. Nutrimax Corp. is most likely to be using which of the following strategies?
68. Market penetration
69. Product development c. Product proliferation d. Market development e. Capacity control

 

 

ANSWER: POINTS:

DIFFICULTY:

a

 

I

Challenging

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

68. Which of the following factors in an industry is most likely to cause excess capacity?
69. Technologically outdated production units b. High customer demand
70. Increasing age of a company’s physical assets
71. Lack of competition from new entrants
72. Limited number of outlets in certain locations

 

 

ANSWER: POINTS:

DIFFICULTY:

c

I

Moderate

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

69. Price signaling in the context of mature industries happens when:
70. the government intervenes to regnlate prices of products. b. companies decide to invest in slow-growing markets.
71. companies decide to sell its patents to generate revenue.
72. companies increase or decrease product prices to convey their intentions to other companies. e. a company concentrates on expanding market share in its existing product markets.

 

 

ANSWER: POINTS:

DIFFICULTY:

d

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

70. Mature industries are generally characterized by:
71. low entry barriers.
72. diseconomies of scale.
73. absence oflarge-scale production. d. a small number of large firms.
74. very low customer demand.

 

 

ANSWER: POINTS:

DIFFICULTY:

d

1

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

71. Which of the following strategies allows interdependent fmns indirectly to coordinate their actions?
72. Market development b. Harvest strategy
73. Divestment strategy
74. Price signaling
75. Market penetration

 

 

ANSWER: POINTS:

DIFFICULTY:

d

1

Challenging

 

LEARNING OBJECTIVES:  SMIA.HILL.15.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

72. Which of the following strategies helps companies with high cost strnctures, allowing them to survive without having to implement strategies to become more productive and efficient?
73. Price signaling
74. Nonprice competition c. Capacity control
75. Market development
76. Price leadership

 

 

ANSWER: POINTS:

DIFFICULTY:

e

I

Easy

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

73. A telecommunications firm is working on new product concept of built-in routers in mobile phones. If the new product will be sold to existing customers, the finn is pursuing a strategy of:
74. product development. b. market penetration.
75. product proliferation. d. market signaling.
76. market development

 

 

ANSWER: POINTS:

DIFFICULTY:

a

 

I

Challenging

 

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.03 -Understand competitive dynamics in mature industries and discuss the strategies managers can develop to increase profitability even when competition is intense

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

74. Which of the following statements is true in the context of declining industries?
75. Not all segments of an industry typically decline at the same rate.
76. A declining industry should ideally use the leadership strategy when it does not have any strengths and the competition is low.
77. Divestment strategy is by which a declining industry seeks to improve sales by improving product quality. d. Greater the exit barriers of a declining industry, lesser is the intensity of competition.
78. Intensity of competition is less in declining industries that sell commodity-like products.

 

ANSWER:                             a POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

75. A strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.
76. divestment b. harvest
77. price signaling
78. leadership
79. capacity control

 

ANSWER:                             d POINTS:                               I DIFFICULTY:                      Easy

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

76. When a company decides to exit an industry by selling off its business assets to another company, it is said to be using a(n) strategy.
77. market penetration b. divestment
78. niche
79. downsizing e. outsourcing

 

ANSWER:                            b POINTS:                                             I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Comprehension

 

77. In deciding on a strategy, a company in a declining industry must do all of the following except
78. lower prices.
79. manage industry capacity.
80. evaluate its strengths relative to the remaining pockets of demand. d. evaluate the severity of decline.
81. monitor its cash flow.

 

ANSWER:                             a POINTS:                               I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining

industries can use to support their business models and profitability NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS:                       Bloom’s: Comprehension

 

78. Competitive intensity in a declining industry is greatest when:
79. the industry is declining slowly instead of rapidly. b. the product is easy to differentiate.
80. exit barriers are high.
81. entry barriers are high. e. technology is stable.

 

ANSWER:                             c POINTS:                               I DIFFICULTY:                      Moderate

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Knowledge

 

79. Music CDs and newspaper sales have been falling as users tum to the Internet for their music and news. Which of the following is NOT a strategy for companies in these declining industries?
80. Leadership b. Chaining
81. Niche
82. Divestment e. Harvest

 

ANSWER:                            b POINTS:                                           I DIFFICULTY:                       Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.04- Outline the different strategies that companies in declining industries can use to support their business models and profitability

NATIONAL STANDARDS:   United States- BUSPROG:  Analytic

KEYWORDS:                       Bloom’s: Application

 

80. In his book Crossing the Chasm. Geoffrey Moore discusses some of the issues involved in marketing technologically new products as markets develop through different stages. What groups does Moore identify and what must companies do if they are to successfully cross the chasm?

 

ANSWER:                             Moore’s thesis is that different groups of customers enter the market for technologically new products at different times. And to appeal to these groups, companies must adopt business models and strategies that are appropriate given the stage of industry development and who is purchasing the company’s products.

The first group to enter the market is innovators. Innovators are technocrats who enjoy and appreciate the new technology for its own sake. They are not very price sensitive. The next group to enter the market is the early adopters. Early adopters realize the potential of the new technology to improve their own business models and are willing to experiment with it. These buyers are not very price sensitive either.

The third group to enter the market is the early majority. This is the leading wave of

the mass market, and the gap between the early adopters and early majority is the chasm. Companies must use a business model to appeal to these buyers and satisfy the growing demand. These buyers tend to be comfortable with technology, but it has to be cost-effective.

The fourth group to enter the market is the late majority. These buyers adopt the new technology because they are convinced it will be somewhat enduring. They tend to be price sensitive. The entry of this group signals the end of the growth stage.

The last group to enter is the laggards. These are the buyers that are often considered

to be technophohie.

Innovators and early adopters are often reached through specialized distribution channels, and word of mouth is very important in the buying decision. Reaching the early majority requires mass-market distribution channels and advertising campaigns that require a different set of marketing  and sales strategies. Companies that cannot adapt their business models fall into the chasm and often go out of business.

POINTS:                               I

DIFFICULTY:                      Challenging

LEARNING OBJECTIVES:  SMIA.HILL.l5.06.02- Discuss the special problems that exist in embryonic and growth industries and how companies can develop strategies to effectively compete

NATIONAL STANDARDS:   United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS:                       Bloom’s: Synthesis