Exam 6: Business-Level Strategy and the Industry Environment

Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company has been facing competition from new entrants. The new entrants offer gadgets in different colors, with compelling artwork embossed on the cases. Seeing the interest in this market, Gadgetbug introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug's attempt to cater to the different segments of customers to deter competition demonstrates:

Market development strategy involves finding new market segments for a company's products.

Which of the following is an advantage of franchising?

A fragmented industry is one composed of a:

Which of the following customer groups represents the leading wave or edge of the mass market?

Which of the following is a disadvantage of franchising?

A technology upgrading strategy is utilized by incumbent companies in a mature industry to deter entry by investing in costly upgrades that potential entrants would have trouble matching.

In deciding on a strategy, a company in a declining industry must do all of the following except

Which of the following statements is true about customer categories in growing industries?

Formal price leadership, or when companies collaborate to set prices, is illegal under antitrust laws.

Fragmented industries typically have high barriers to entry.

Relish Inc. created the first national chain of fast-food restaurants in a previously fragmented industry. This is called divestment.

The first group of customers to enter the market for a new product are called:

One characteristic of embryonic industries is unconventional and specialized distribution channels.

Mature industries are generally characterized by:

Nutrimax Corp., a breakfast cereal company, has designed extensive and elaborate advertising campaigns for its existing products. The campaigns mainly focus on the features and benefits of the products that differentiate the cereals from the competition. The massive advertising and marketing initiatives are also intended to intimidate new entrants and rivals. Nutrimax Corp. is most likely to be using which of the following strategies? 

Who among the following is most likely to fall under the category of laggards in the context of customer groups?

An industry moves from embryonic to growth stage when:

Laggards are the customers who are the first ones to try and adopt a new technology.

Franchisees essentially pursue independent strategies and do not use the business model of the franchisor.