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

Key to it all is staying focused on what HSN strategy is and who its customers are. Grossman stated that they are not trying to be Amazon-all things to all people.

Question 2

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

In the introduction stage, products are unfamiliar to consumers. Market segments are not well-defined, and product features are not clearly specified.

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 the maturity stage of the industry life cycle, rivalry among existing rivals intensifies because of fierce price competition at the same time that expenses associated with attracting new buyers are rising. It also becomes more difficult for firms to differentiate their offerings because users have a greater understanding of products and services.

Question 4

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 industry life cycle, rivalry among existing rivals intensifies because of fierce price competition at the same time that expenses associated with attracting new buyers are rising. It also becomes more difficult for firms to differentiate their offerings because users have a greater understanding of products and services.

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

A study of 260 mature businesses in need of a turnaround identified three strategies used by successful companies:asset and cost surgery, selective product and market pruning, and piecemeal productivity improvements.

Question 6

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

Very often, mature firms tend to have assets that do not produce any returns. These include real estate, buildings, and so on. Outright sales or sale and leaseback free up considerable cash and improve returns. Investment in new plants and equipment can be deferred. Firms in turnaround situations try to aggressively cut administrative expenses and inventories and speed up collection of receivables.

Question 7

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 include 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.

Question 8

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

Four basic strategies are available in the decline phase:maintaining, harvesting, exiting, or consolidating.

Question 9

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 10

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

Most mature or declining firms have many product lines that are losing money or are only marginally profitable. One strategy is to discontinue such product lines and focus all resources on a few core profitable areas.

Question 11

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

Industry life cycles are important because the emphasis on various generic strategies, functional areas, value-creating activities, and overall objectives varies over the course of an industry life cycle.

Question 12

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 13

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 14

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

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

Question 15

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

In the introduction stage, products are unfamiliar to consumers. Market segments are not well-defined, and product features are not clearly specified. The early development of an industry typically involves low sales growth, rapid technological change, operating losses, and the need for strong sources of cash to finance operations. Since there are few players and not much growth, competition tends to be limited.

Question 16

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 17

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 find the product attractive.
A) external
B) internal
C) global
D) environmental

Accepted Answer

Most turnarounds require a firm to carefully analyze the external and internal environments. The external analysis leads to identification of market segments or customer groups that may still find the product attractive.

Question 18

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 the market in?
A) introduction
B) growth
C) maturity
D) decline

Accepted Answer

In the maturity stage of the industry life cycle, rivalry among existing rivals intensifies because of fierce price competition at the same time that expenses associated with attracting new buyers are rising. Advantages based on efficient manufacturing operations and process engineering become more important for keeping costs low as customers become more price sensitive. It also becomes more difficult for firms to differentiate their offerings because users have a greater understanding of products and services.

Question 19

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.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

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

Two factors make it extremely difficult for a rival to challenge Atlas Door in the short term:(1) The success that Atlas Door has enjoyed with its just-in-time scheduling and production systems helps the firm not only lower costs but also respond quickly to customer needs, and (2) the strong, positive reputational effects that it has earned with its customers increases their loyalty and would take significant time for rivals to match.

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?

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

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

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

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

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?

Piecemeal productivity improvements during a turnaround typically do not involve

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

As markets mature,

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?

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

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

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

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.

The growth stage of the industry life cycle is characterized by

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 find the product attractive.

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 the market in?

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