Which of the following statements is true in the context of declining industries?
A)Not all segments of an industry typically decline at the same rate.
B)A declining industry should ideally use the leadership strategy when it does not have any strengths and the competition is low.
C)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.
E)Intensity of competition is less in declining industries that sell commodity-like products.

Question

Quizplus · Accepted Answer

Different segments of an industry may decline at different rates due to various factors such as changing customer preferences, technological advancements, and competition.

Answer: B
 The leadership strategy is ideal for declining industries with high market share, strong brand recognition, and technological leadership. If a declining industry does not have any strengths and the competition is low, it may consider other strategies such as divestment or harvesting.

Answer: C
 The divestment strategy involves selling or closing down unprofitable or non-core business units to improve overall profitability. It does not necessarily involve improving product quality.

Answer: D
 Greater the exit barriers of a declining industry, higher is the intensity of competition as firms struggle to remain in the industry and compete for limited resources and customers.

Answer: E
 The intensity of competition is typically higher in declining industries that sell commodity-like products as firms typically focus on price competition to gain market share. However, it may depend on other factors such as the level of product differentiation and switching costs for customers.

Which of the Following Statements Is True in the Context