Question 1

What can a firm do in a declining industry?

Accepted Answer

A declining industry exhibits generally excess capacity, lack of technical change, a declining number of competitors, a high average age of resources, and strong price competition.
Two factors determine the intensity of competition in a declining industry: the balance between capacity and output, and the demand for the product. The adjustment of capacity to demand is itself determined by three elements: the predictability of decline, barriers to exit, and the strategies of the surviving firms.
Four strategies are identified by Harrigan and Porter for declining industries:
1-Leadership
Showing commitment to the industry, acquiring rivals, helping competitors to exit, and providing pessimistic forecasts, are ways to play a dominant role in that industry
2-Niche
Identifying a niche where demand is stable, where demand is inelastic, and that other firms are not likely to invade. Then, playing a dominant role in that niche allows firms to reap profits.
3-Harvest
This strategy involves the maximization of a firm's cash flows from its existing assets, while avoiding further investment.
4-Divest
Divesting before the decline of an industry will allow the firm to sell its assets.

Question 2

According to W. Buffet, which evolution characterizes the media industry?

Accepted Answer

A) A decrease in innovation 
B) An increase in potential competitive advantages 
C) A shift from a "franchise" to a "business" 
D) A decline of the industry 
A) A decrease in innovation 
B) An increase in potential competitive advantages 
C) A shift from a "franchise" to a "business" 
D) A decline of the industry C

Question 3

The conventional model of strategy implementation in mature industries suggests that strategy is:

Accepted Answer

A) Based on differentiation 
B) Cost-based 
C) Primarily reactive to remaining market opportunities 
D) Always flexible 
A) Based on differentiation 
B) Cost-based 
C) Primarily reactive to remaining market opportunities 
D) Always flexible B

Question 4

How does an industry's maturity impact potential economies of scale?

Accepted Answer

A) It has no impact at all 
B) A shrinking market destroys the potential for economies of scale 
C) Greater standardization facilitates the exploitation of economies of scale 
D) It increases competition and the risk of price wars 
A) It has no impact at all 
B) A shrinking market destroys the potential for economies of scale 
C) Greater standardization facilitates the exploitation of economies of scale 
D) It increases competition and the risk of price wars

Question 5

Banks, supermarkets, credit card companies, hotels, and Las Vegas casinos apply the concept of:

Accepted Answer

A) High rollers 
B) Intensive players 
C) High risk profile customers 
D) Four star customers 
A) High rollers 
B) Intensive players 
C) High risk profile customers 
D) Four star customers

Question 6

Maturity implies that an industry:

Accepted Answer

A) Is close to its end 
B) Still has some opportunities 
C) Generates very low returns 
D) Has incumbents that are all trying to exit 
A) Is close to its end 
B) Still has some opportunities 
C) Generates very low returns 
D) Has incumbents that are all trying to exit

Question 7

Electronic vacuum tubes, cigars, leather tanning, baby foods, and meat processing are examples of:

Accepted Answer

A) Technology-intensive industries 
B) Rejuvenated industries 
C) Mature industries 
D) Declining industries 
A) Technology-intensive industries 
B) Rejuvenated industries 
C) Mature industries 
D) Declining industries

Question 8

Mature industries generally have lower profitability

Accepted Answer

A) True 
 B)False

Question 9

How can a firm fight the negative effects of bureaucracy, and build a structure more conducive to innovation?

Accepted Answer

Bureaucracy is defined as an organizatio

Question 10

Why do firms in mature industries tend to have higher gearing ratios?

Accepted Answer

A) Bankers are averse to lending to industries making risky new products 
B) Mature firms have significant assets, long financial track records, and can obtain more debt to lower their overall cost of capital than firms in growth industries 
C) Bankers have actually heard of the names of these firms before studying detailed borrowing proposals 
D) All of the above 
A) Bankers are averse to lending to industries making risky new products 
B) Mature firms have significant assets, long financial track records, and can obtain more debt to lower their overall cost of capital than firms in growth industries 
C) Bankers have actually heard of the names of these firms before studying detailed borrowing proposals 
D) All of the above

Question 11

To break the cognitive maps of middle management in a mature industry one could hire experienced managers from outside the industry

Accepted Answer

A) True 
 B)False

Question 12

For mature industries three cost drivers are especially critical:

Accepted Answer

A) Economies of scale, the experience curve, and low overheads 
B) Low-cost inputs, low overheads (or, more generally, good efficiency in using all inputs), and economies of scale 
C) Low-cost inputs, R&D expenditures, and economies of scope 
D) Economies of scale, economies of scope, and R&D expenditures 
A) Economies of scale, the experience curve, and low overheads 
B) Low-cost inputs, low overheads (or, more generally, good efficiency in using all inputs), and economies of scale 
C) Low-cost inputs, R&D expenditures, and economies of scope 
D) Economies of scale, economies of scope, and R&D expenditures

Question 13

To earn a satisfying return in a declining industry a firm must have:

Accepted Answer

A) A well-oiled machine bureaucracy 
B) Pockets of demand that are resilient and relatively price-insensitive 
C) Plans to leave the industry at short notice 
D) All of the above 
A) A well-oiled machine bureaucracy 
B) Pockets of demand that are resilient and relatively price-insensitive 
C) Plans to leave the industry at short notice 
D) All of the above

Question 14

Hard Rock Café and Planet Hollywood illustrate the concept of:

Accepted Answer

A) Experience economy 
B) Entertainment industry 
C) Celebrity-backed businesses 
D) Extremely competitive markets 
A) Experience economy 
B) Entertainment industry 
C) Celebrity-backed businesses 
D) Extremely competitive markets

Question 15

Enterprise Rent-A-Car's different strategy to Avis and Hertz is to target customers who want to rent a car from home, rather than when travelling

Accepted Answer

A) True 
 B)False

Question 16

Tires, brassieres, and fishing rods are mature industries. These industries exhibit:

Accepted Answer

A) Extreme stability and no competitive or technological change 
B) Totally standardized products 
C) Players still pursuing technological improvement 
D) A paradoxical "technological regression" 
A) Extreme stability and no competitive or technological change 
B) Totally standardized products 
C) Players still pursuing technological improvement 
D) A paradoxical "technological regression"

Question 17

Fashion clothing, airlines, coffee shops, and steel illustrate:

Accepted Answer

A) Mature industries 
B) Emerging industries 
C) Thriving industries 
D) Mature industries where innovation is still possible 
A) Mature industries 
B) Emerging industries 
C) Thriving industries 
D) Mature industries where innovation is still possible

Question 18

Differentiation exists in the early stages of the industry life cycle, but is not an option in a mature industry

Accepted Answer

A) True 
 B)False

Question 19

Are mature industries identical?

Accepted Answer

A) Yes 
B) No 
C) They are different but with similar characteristics 
D) They all follow the same extinction pattern 
A) Yes 
B) No 
C) They are different but with similar characteristics 
D) They all follow the same extinction pattern

Question 20

Why should structures, systems, and management styles in firms operating in mature industries, mesh several performance goals? Because:

Accepted Answer

A) Employees are more demanding in these firms 
B) Competitive advantage requires achieving two conflicting aims: operational efficiency and innovation 
C) They are always necessary, regardless of the stage of the industry life cycle 
D) Competition is stronger in mature industries 
A) Employees are more demanding in these firms 
B) Competitive advantage requires achieving two conflicting aims: operational efficiency and innovation 
C) They are always necessary, regardless of the stage of the industry life cycle 
D) Competition is stronger in mature industries

What can a firm do in a declining industry?

According to W. Buffet, which evolution characterizes the media industry?

The conventional model of strategy implementation in mature industries suggests that strategy is:

How does an industry's maturity impact potential economies of scale?

Banks, supermarkets, credit card companies, hotels, and Las Vegas casinos apply the concept of:

Maturity implies that an industry:

Electronic vacuum tubes, cigars, leather tanning, baby foods, and meat processing are examples of:

Mature industries generally have lower profitability

How can a firm fight the negative effects of bureaucracy, and build a structure more conducive to innovation?

Why do firms in mature industries tend to have higher gearing ratios?

To break the cognitive maps of middle management in a mature industry one could hire experienced managers from outside the industry

For mature industries three cost drivers are especially critical:

To earn a satisfying return in a declining industry a firm must have:

Hard Rock Café and Planet Hollywood illustrate the concept of:

Enterprise Rent-A-Car's different strategy to Avis and Hertz is to target customers who want to rent a car from home, rather than when travelling

Tires, brassieres, and fishing rods are mature industries. These industries exhibit:

Fashion clothing, airlines, coffee shops, and steel illustrate:

Differentiation exists in the early stages of the industry life cycle, but is not an option in a mature industry

Are mature industries identical?

Why should structures, systems, and management styles in firms operating in mature industries, mesh several performance goals? Because:

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Nature and Sources of Competitive Advantage

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters

Exam 13: Competitive Advantage in Mature Industries

What can a firm do in a declining industry?

According to W. Buffet, which evolution characterizes the media industry?

The conventional model of strategy implementation in mature industries suggests that strategy is:

How does an industry's maturity impact potential economies of scale?

Banks, supermarkets, credit card companies, hotels, and Las Vegas casinos apply the concept of:

Maturity implies that an industry:

Electronic vacuum tubes, cigars, leather tanning, baby foods, and meat processing are examples of:

Mature industries generally have lower profitability

How can a firm fight the negative effects of bureaucracy, and build a structure more conducive to innovation?

Why do firms in mature industries tend to have higher gearing ratios?

To break the cognitive maps of middle management in a mature industry one could hire experienced managers from outside the industry

For mature industries three cost drivers are especially critical:

To earn a satisfying return in a declining industry a firm must have:

Hard Rock Café and Planet Hollywood illustrate the concept of:

Enterprise Rent-A-Car's different strategy to Avis and Hertz is to target customers who want to rent a car from home, rather than when travelling

Tires, brassieres, and fishing rods are mature industries. These industries exhibit:

Fashion clothing, airlines, coffee shops, and steel illustrate:

Differentiation exists in the early stages of the industry life cycle, but is not an option in a mature industry

Are mature industries identical?

Why should structures, systems, and management styles in firms operating in mature industries, mesh several performance goals? Because:

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Nature and Sources of Competitive Advantage

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters