MGT 429 Chapter 6

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. True False

True

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. True False

False

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

True

Most embryonic industries emerge when a technological innovation creates a new product opportunity. True False

True

According to the chapter there are several reasons that an industry may be fragmented i.e. consisting of many small companies rather than a few large ones. Please match the primary reason of being fragmented on the right to the specific industry on the left. a. Restaurant b. Cement c. Custom-made jewelry d. Catering

a. restaurant is low entry barrier b. cement is high transportation cost c. jewlery is specialized customer needs d. catering is specialized customer needs

One strategy used to consolidate fragmented industries is: a. vertical mergers. b. chaining. c. product proliferation. d. price signaling.

b. chaining

Competition within a declining industry can still be high when a. many companies are exiting the industry. b. the exit barriers are high. c. the barriers to entry are high. d. the products are imitable.

b. the exit barriers are high

Price signaling in the context of mature industries happens when: a. the government intervenes to regnlate prices of products. b. companies decide to invest in slow-growing markets. c. companies increase or decrease product prices to convey their intentions to other companies. d. companies decide to sell its patents to generate revenue.

c. companies increase or decrease product prices to convey their intentions to other companies

In many fragmented industries the __________ business model will be the most profitable to pursue. a. cost leadership b. differentiation c. focus d. broad differentiation

c. focus

Facebook entered the high school market in 2005 and the high school model, according to Zuckerberg, "was very similar to the college model that we had". Which nonprice competitive strategy did Facebook use? a. Market penetration b. Product development c. Market development d. Product proliferation

c. market development

Which strategy introduced in the chapter can be used for both deterring new entry and managing industry rivalry? a. Price signaling b. Price cutting c. Product proliferation d. Product development

c. product proliferation

Which of the following is not a characteristic that innovators/early adopters in an embryonic market are likely to have a. They are technologically savvy customers. b. They use specialized distribution channels. c. They value ease of use and reliability. d. They are not particularly price sensitive.

c. they value ease of use and reliability

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

d. niche strategy

What factors have made the electric car market still an embryonic market? a. Limited range of driving b. A lack of charging stations c. High prices d. Poorly developed distribution channels e. All of the above

e. All of the above

What benefits or advantages do first or early movers i.e. those companies who enter the market at the embryonic stage have? a. Technological leadership e.g. patents b. Customer loyalty c. Customer switching costs d. Preemptive access of scarce resources e. All of the above

e. all of the above

Which group is the fourth group of customers to enter a market? a. Innovators b. Early adopters c. Laggards d. Early majority e. Late majority

e. late majority