ch 6

A strategy that involves developing new products to serve every niche and segment of the marketplace to prevent startup companies from entering an industry is known as the:

product proliferation strategy.

Which of the following would exemplify a company crossing the competitive chasm

A company enters an industry during the embryonic stage of that industry and then seeks to grow with the industry to serve the mass market.

While working for a start-up software company with an innovative product in an embryonic industry, Avery has been asked to suggest a strategy for developing a mass market for the company. Which of these strategies should Avery recommend

A strategy to increase the efficiency of the product, lowering its cost and price to consumers

The 12 nations of OPEC gather regularly to discuss oil production across the globe. Their decisions and announcements drive crude oil production and prices, even for nonmember countries. What type of strategy is OPEC using?

Capacity control strategy

Companies in a fragmented industry can combine into a single, larger enterprise to build a more compelling national brand. What type of strategy are they using?

Horizontal acquisitions

In a mature industry, a company can employ several potential strategies to compete with existing companies in the industry. Which of these is a strategy that a company in this situation uses to manage rivalry

Identify a new market for the company's existing products

A fragmented industry would be characterized by which of the following

Low barriers to entry and a steady stream of new entrant

Often companies employ a blend of the franchising and chaining model, with some locations owned by franchisees and others owned by the corporation. Which of these is an example of this blended model and the implications the structure can have on a stakeholder group

McDonald's announced plans to increase the minimum wage of its workers at 1,500 corporate-owned stores, but the decision had no impact on the workers at 40,000 independent stores.

Recently, a startup has begun developing appliances with built-in technology features, such as WiFi connections to smartphone apps that track refrigerator stock in staple items. Craig, the product development manager in an established home appliance company, needs to deal with this situation. Which of these strategies can he use to deter this rival before it gains traction in the industry

Move up the launch date for a new line of tech-connected appliances his team has been working on

The passenger railroad industry in the United States has been in decline for the last several decades. For example, Amtrak is sustained for most of its operations by taxpayer subsidies. There is one exception—the Northeast corridor, which serves Boston, Philadelphia, New York City, and Washington, D.C. Identify the strategy that passenger rail companies are using there and how they could use this same strategy to serve other parts of the country.

Niche strategy: Southern California could also have rail passenger lines connecting densely populated cities with strong commercial ties in a region of the country with heavy car traffic.

Social media has become an excellent strategy for start-up companies with little access to capital to help spread the word about their innovative products. Using video and customer testimonials and encouraging others to share their experiences with the product, companies can generate third-party endorsements of their products and services. This is an example of what strategy

Observability

Several strategies for mature industries have the potential to result in antitrust violations that could result in court action if not implemented correctly. Each of these strategies must be undertaken ethically and legally to avoid these kinds of repercussions. Which describes a potentially illegal implementation?

Price leadership: Apple collaborates with e-book publishers to raise prices on millions of titles offered through the iBooks store

Keesha, the marketing manager for a running shoe company, has been tasked with implementing a market development strategy. What first step could she take?

Research the market segments of individuals who might purchase running shoes and compare them to the demographics of the company's existing customers. Identify any customer segments the company is not currently serving.

An industry moves from the embryonic stage to the growth stage when a mass market starts to develop for its product. What three things spur a mass market to emerge?

Technology advances to make the product easier to use, complementary products are developed, and the industry finds ways to reduce the cost of the product and lower prices.

Which of these industries exhibits the most factors that indicate it is in a severe decline

The wired telecommunications industry has a mature infrastructure, and nearly all of the companies operating in the industry offer the same services to the same customers.

Social media has become an excellent tool for organizations to help spread the word about their products and causes. Which of these demonstrates viral diffusion at work on a social media platform

Through a video campaign on social media that included numerous videos of celebrities dumping buckets of water over their heads, the ALS Association raised more than $220 million.

After a company has developed a value innovation in a fragmented industry, it often needs to scale up quickly. Which of these is a strategy for growing a business with multiple corporate-owned locations

chaining

Largely replaced by streaming media, the VCR is a seldom-used piece of electronics found in few remaining homes. The VCR industry is thus in the ending portion of the _____ stage

declining

Nonprice competition is a group of market strategies that companies utilize to manage rivalry without price cutting and price wars. To employ one of these strategies, a company must:

define its differentiation through products or market segments.

Jinan is part of the team developing strategies for new wearable technology that integrates smartphone and fitness tracker tools. To accelerate customer demand and demonstrate the product's relative advantage, Jinan should recommend:

educating customers about the ways in which the new device replaces several products among their personal gadgets and showing how the consolidated product saves them money and helps them achieve their fitness goals.

Using her beloved grandmother's recipe for fruit-filled empanadas, Marianna opens a drive-up kiosk specializing in these sweet treats. The concept is profitable and gains a lot of media attention. Marianna wants to open additional locations, but she doesn't have a lot of start-up capital. Which of these consolidation strategies for fragmented industries could she utilize

franchising

In the market demand S-shaped growth curve, the early majority is the

group of customers who begin purchasing a product at the beginning of an industry's transition from embryonic to growing.

Logan Company wishes to exit a declining industry and is making decisions to optimize its cash flow in the short term. The company is using a:

harvest strategy.

A company in a declining industry employs several tactics as part of its current strategy, including slashing prices, ramping up marketing, and acquiring smaller businesses. This company is executing a

leadership strategy

A group of strategies designed to moderate the intensity of competition within a mature industry among existing companies within that industry is known as:

managing rivalry

If an industry includes a single, dominant company operating as a near-monopoly, it is most likely in which stage of the industry life cycle?

mature

Companies utilize strategies that deter entry into their mature industries because

new entrants can generate additional competitive forces that may cause a company to lose customers, lose profitability, and reduce the return on investment

For companies to successfully implement a divestment strategy, they must

recognize the signs of an industry's decline earlier than their competitors to divest while the company still has something to offer.

As a customer group, innovators are:

skilled in technology and able to experiment with systems that have glitches and failures.

Organizations can experience a high return on investment if they are able to consolidate a fragmented industry. This is known as:

value innovation.