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

81.

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 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.

AACSB: Analytic Blooms: Remember Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 1 Easy Topic: Industry Life Cycle Stages: Strategic Implications

82.

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

AACSB: Analytic Blooms: Understand Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications

83.

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 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.

AACSB: Analytic Blooms: Understand Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications

84.

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.  Advantages that cannot be duplicated by other competitors are difficult to achieve. C.  The market supports premium pricing, which attracts additional competitors. D.  The magnitude of pricing differences and product differentiation is larger than in the growth stage. 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.

AACSB: Analytic Blooms: Understand Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications

85.

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 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.

AACSB: Analytic Blooms: Remember Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 1 Easy Topic: Industry Life Cycle Stages: Strategic Implications

86.

The most likely time to pursue a harvest strategy is in a situation of _______.    A.  high growth B.  strong competitive advantage C.  decline in the market life cycle D.  mergers and acquisitions Four basic strategies are available in the decline phase: maintaining, harvesting, exiting, or consolidating.

AACSB: Analytic Blooms: Understand Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications

87.

During the decline stage of the industry life cycle, __________ refers to obtaining as much profit as possible and requires that costs be decreased quickly.    A.  maintaining B.  exiting C.  harvesting D.  consolidating Harvesting involves obtaining as much profit as possible and requires that costs be reduced quickly.

AACSB: Analytic Blooms: Remember Learning Objective: 05-07 The importance of considering the industry life cycle to determine a firm's business-level strategy and its relative emphasis on functional area strategies and value-creating activities. Level of Difficulty: 1 Easy Topic: Industry Life Cycle Stages: Strategic Implications

88.

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

AACSB: Analytic Blooms: Remember Learning Objective: 05-08 The need for turnaround strategies that enable a firm to reposition its competitive position in an industry. Level of Difficulty: 1 Easy Topic: Industry Life Cycle Stages: Strategic Implications

89.

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

AACSB: Analytic Blooms: Understand Learning Objective: 05-08 The need for turnaround strategies that enable a firm to reposition its competitive position in an industry. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications

90.

Which of the following is not a reason for the successful turnaround that Ford experienced in 2011 under CEO Mulally?    A.  downsizing through the sale of non-Ford brands B.  focus on a narrower range of cars C.  tightening of the product design across brands D.  increasing its manpower across the company First, a plan was executed to undertake a dramatic refinancing of the business by raising bank loans secured against company assets. Second, the firm concentrated resources on the Ford brand and sold off the Premier Automotive Group (PAG) businesses. Third, Ford narrowed the range of cars down to 36 from 97 different models. Fourth, emphasis was placed on quality and being the best in class. Fifth, more shared platforms for building cars economically were installed. Sixth, Ford cut half of its shop-floor workforce and a third of its office jobs. By 2011, 17 factories had been closed and employment was reduced to 75,000 from 128,000.

AACSB: Analytic Blooms: Understand Learning Objective: 05-08 The need for turnaround strategies that enable a firm to reposition its competitive position in an industry. Level of Difficulty: 2 Medium Topic: Industry Life Cycle Stages: Strategic Implications