Question 1

When Cindy Grossman turned around HSN successfully in 2014, which of the following was not one of the practices she used?
A) engaging stakeholders in the discussion
B) developing a skilled, committed management team
C) redesigning the company offerings
D) making all best efforts to offer something for everyone

Accepted Answer

While Cindy Grossman did focus on offering a wide range of products, she did not necessarily aim to offer something for everyone. Instead, she focused on identifying and targeting specific customer segments with personalized experiences and products.

Question 2

In the ________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.
A) introduction
B) growth
C) decline
D) maturity

Accepted Answer

In the decline stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.

Question 3

Which of the following is most often true of mature markets?
A) Some competitors enjoy a significant operating advantage due to increasing experience effects.
B) The market supports premium pricing, which attracts additional competitors.
C) Advantages that cannot be duplicated by other competitors are difficult to achieve.
D) The magnitude of pricing differences and product differentiation is larger than in the growth stage.

Accepted Answer

In mature markets, competitors have had the time to establish themselves and develop their own advantages. It becomes harder for new competitors to achieve advantages that cannot be duplicated by existing competitors, leading to a more level playing field. Option A is incorrect because experience effects do not necessarily result in a significant operating advantage for some competitors in mature markets. Option B is incorrect because while the market may support premium pricing, it also attracts additional competitors, making it a more competitive environment. Option D is incorrect because in the growth stage, there is typically more price differentiation and product differentiation as companies try to establish their brand and gain market share, whereas in the mature market, the market tends to become more standardized.

Question 4

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?
A) asset and cost surgery
B) selective product and market pruning
C) piecemeal productivity improvements
D) global expansion

Accepted Answer

The strategy of selectively pruning products and markets involves shedding or selling off non-core or non-performing businesses or brands, and focusing on the core businesses or brands that are likely to generate better returns. This is exactly what Proctor and Gamble has announced, indicating that it will sell off or close down up to 100 of its brands.

Question 5

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?
A) asset and cost surgery
B) selective product and market pruning
C) piecemeal productivity improvements
D) global expansion

Accepted Answer

The given options describe strategies used by firms engaged in successful turnarounds, and global expansion is not mentioned as one of those strategies. Therefore, option D is the correct answer.

Question 6

Which of the following statements about the introduction stage of the market life cycle is true?
A) It produces relatively large, positive cash flows.
B) Strong brand recognition seldom serves as an important switching cost.
C) Market share gains by pioneers are usually easily sustained for many years.
D) Products offered by pioneers may be perceived as differentiated because they are new.

Accepted Answer

The introduction stage of the market life cycle is characterized by the entry of a new product, and as a result, products offered by pioneers may be perceived as differentiated because they are new. This is because consumers have not had any experience with the product and may be more inclined to try something new. In contrast, during the introduction stage, cash flows are typically negative or small, brand recognition plays a minor role as a switching cost, and market share gains are not easily sustained.

Question 7

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is themarket in?
A) introduction
B) growth
C) maturity
D) decline

Accepted Answer

The market is in the maturity stage where competitors have already introduced the product and the key technology no longer has patent protection. In this stage, experience is no longer an advantage and price competition becomes important.

Question 8

As markets mature,
A) costs continue to increase.
B) application for patents increase.
C) differentiation opportunities increase.
D) there is increasing emphasis on efficiency.

Accepted Answer

In the maturity stage of the industry life cycle, advantages based on efficient manufacturing operations and process engineering become more important for keeping costs low as customers become more price sensitive.

Question 9

In the ________ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high.
A) growth
B) introduction
C) decline
D) maturity

Accepted Answer

The description fits the characteristics of the maturity stage of the industry life cycle, where the market has already reached saturation and competition is high, leading to a greater emphasis on process design and cost-cutting measures.

Question 10

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?
A) introduction
B) growth
C) maturity
D) decline

Accepted Answer

In the maturity stage of the industry life cycle, aggregate industry demand softens. As markets become saturated, there are few new adopters. Rivalry among existing rivals intensifies because of fierce price competition at the same time that expenses associated with attracting new buyers are rising.

Question 11

Rivals would find it difficult to challenge Atlas Door in the short run because of
A) weak customer loyalty.
B) high barriers to entry.
C) high threat of substitution.
D) low buyer switching costs.

Accepted Answer

High barriers to entry would make it difficult for rivals to enter Atlas Door's market and compete with them in the short run, giving Atlas Door an advantage over potential challengers. Weak customer loyalty, high threat of substitution, and low buyer switching costs would not necessarily prevent rivals from competing with Atlas Door in the short run.

Question 12

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?
A) introduction
B) growth
C) maturity
D) decline

Accepted Answer

In the maturity stage of the market life cycle, competition is high and there are many players in the market. This means that it becomes difficult for any one player to maintain a large pricing or differentiation advantage over their competitors. As the market becomes more saturated with competitors, the advantages that may have existed in the earlier stages of the lifecycle begin to diminish.

Question 13

Outright sales or sale and leaseback free up considerable cash and improve returns. This is an example of which turnaround strategy used by successful companies?
A) asset and cost surgery
B) selective product and market pruning
C) piecemeal productivity improvements
D) global expansion

Accepted Answer

Outright sales or sale and leaseback involve selling assets and reducing costs, which is a characteristic of the asset and cost surgery turnaround strategy.

Question 14

Which of these statements regarding the industry life cycle is true?
A) Partial power of the market life cycle is its ability to serve as a short-run forecasting device.
B) Trends suggested by the market life cycle model are generally not reversible or repeatable.
C) It points out the need to maintain a differentiation advantage and a low cost advantage.
D) It is important for company generic strategies, functional areas, value-creating activities, and overall objectives.

Accepted Answer

The industry life cycle is important for company generic strategies, functional areas, value-creating activities, and overall objectives. The model helps companies understand the current stage of their industry, identify potential future stages, and adjust their strategies accordingly. Option A is incorrect; partial power of the market life cycle is its ability to serve as a long-term forecasting device. Option B is incorrect; trends suggested by the market life cycle model can be reversible or repeatable. Option C is incorrect; the industry life cycle highlights the need to maintain either a differentiation advantage or a low cost advantage, but not necessarily both.

Question 15

The most likely time to pursue a harvest strategy is in a situation of
A) high growth.
B) strong competitive advantage.
C) mergers and acquisitions.
D) decline.

Accepted Answer

Harvest strategy is pursued when a company is in a situation of decline, where it aims to generate maximum cash flow from its assets and gradually decrease its investment in the business. It is usually done when a company realizes that it cannot sustain its growth or it has reached maturity in its product life cycle. Thus, the correct answer is D.

Question 16

Most turnarounds require a firm to carefully analyze its relevant environments. The ________ analysis leads to identification of market segments or customer groups that may still findtheproduct attractive.
A) external
B) internal
C) global
D) environmental

Accepted Answer

The external analysis considers factors outside of the firm such as competitors, economic conditions, and customer behavior. This analysis will help identify potential market segments that are still interested in the product. Internal analysis is focused on factors within the firm such as operations and resources. Global analysis is relevant for firms operating in multiple countries, and environmental analysis considers factors related to sustainability and social responsibility.

Question 17

The growth stage of the industry life cycle is characterized by
A) in-kind competition (from the same type of product).
B) premium pricing.
C) a growing trend to compete on the basis of price.
D) retaliation by competitors whose customers are stolen.

Accepted Answer

The growth stage is the second stage of the product life cycle, characterized by strong increases in sales and growing competition.

Question 18

Piecemeal productivity improvements during a turnaround typically do not involve
A) business process reengineering.
B) increased capacity utilization.
C) benchmarking.
D) expansion of company product market scope.

Accepted Answer

Piecemeal productivity improvements involve making small changes in one or more areas of the business to increase efficiency and reduce costs. This typically does not involve expanding the company's product market scope, which would be a more significant change and not considered piecemeal. The other choices - business process reengineering, increased capacity utilization, and benchmarking - are commonly used methods for achieving piecemeal productivity improvements during a turnaround.

Question 19

Improving business processes by reengineering them, benchmarking specific activities against industry leaders, encouraging employee input to identify excess costs, increasing capacityutilization, and improving employee productivity lead to a significant overall gain. These are examples of which turnaround strategy used by successful companies?
A) asset and cost surgery
B) selective product and market pruning
C) piecemeal productivity improvements
D) global expansion

Accepted Answer

There are many ways in which a firm can eliminate costs and improve productivity. Although individually these are small gains, they cumulate over a period of time to substantial gains. Improving business processes by reengineering them, benchmarking specific activities against industry leaders, encouraging employee input to identify excess costs, increasing capacity utilization, and improving employee productivity lead to a significant overall gain.

Question 20

In the ________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.
A) growth
B) maturity
C) introduction
D) decline

Accepted Answer

This is the description of the introduction stage of the industry life cycle. The emphasis on product design is high as companies are trying to establish their product in the market. Competition is low as the market is still new and growth is slow.

Quiz 5: Business-Level Strategy Creating and Sustaining Competitive Advantages

When Cindy Grossman turned around HSN successfully in 2014, which of the following was not one of the practices she used?

In the ________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.

Which of the following is most often true of mature markets?

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?

Which of the following statements about the introduction stage of the market life cycle is true?

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is themarket in?

As markets mature,

In the ________ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high.

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Rivals would find it difficult to challenge Atlas Door in the short run because of

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

Outright sales or sale and leaseback free up considerable cash and improve returns. This is an example of which turnaround strategy used by successful companies?

Which of these statements regarding the industry life cycle is true?

The most likely time to pursue a harvest strategy is in a situation of

Most turnarounds require a firm to carefully analyze its relevant environments. The ________ analysis leads to identification of market segments or customer groups that may still findtheproduct attractive.

The growth stage of the industry life cycle is characterized by

Piecemeal productivity improvements during a turnaround typically do not involve

In the ________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.