BPL 5100 QUIZ 2 Questions with Answers
Introduction stage of product life cycle - Answer-The product is introduced to the target market.
Characterized by:
1. Sales grow slowly.
2. Minimal profits as a result of large investment costs in development
Growth stage of product life cycle - Ans...
BPL 5100 QUIZ 2 Questions with
Answers
Introduction stage of product life cycle - Answer-The product is introduced to the target
market.
Characterized by:
1. Sales grow slowly.
2. Minimal profits as a result of large investment costs in development
Growth stage of product life cycle - Answer-Characteristics:
•Rapid increases in sales
•Competition appears
•Profit peaks
•Advertising shifts to selective demand.
•Sales grow at an increasing rate because of new people trying the product and repeat
purchasers bought again.
•Changes appear..."New and Improved!"
Reasons why companies pursue Related Diversification: - Answer-1. Economics of
Scope
2. Enhancing Revenue/Differentiation
3. Market Power
4. Pooled Negotiation
5. Vertical Integration
Market Power - Answer-Restricting or controlling the supply chain to you
Pooled Negotiation (power) - Answer-restrict and keep competitors out
Backwards integration - Answer-buying out suppliers to control your upstream
Ex. toyota buying out seatbelt manufacturers so they can't sell those seatbelts to
anyone else)
Forward integration - Answer-buying out distributors to control your downstream)
(ex. Ford buying out dealerships so that everyone who sells Ford cars can sell it for the
same price)
Unrelated Diversification - Answer-creating or acquiring companies in completely
unrelated businesses
Parenting - Answer-Large corporation that owns smaller businesses
, ex. Ex. Berkshire Hathaway owns Geico, Duracell, Fruit of the loom (no connection
between any of these companies)
Restructuring - Answer-redesigning an organization so that it can more effectively and
efficiently serve its customers
what are the 3 ways to restructure? - Answer-1. Asset restructuring
2. Capital Restructuring
3. Management Restructuring
Asset restructuring - Answer-restructuring your assets ex. You have too many
warehouses, lets get rid of some of those
Capital Restructuring - Answer-Rebalancing your debt to equity ratio ex. allowing loans
to pay off debt
Management Restructuring - Answer-Getting the talent to run the company ex.
Swapping out old management for new management who can do the job better
maturity stage of product life cycle - Answer-market place becomes saturated
decline stage - Answer-a long-run drop in sales
consolidation strategy - Answer-a firm's acquiring or merging with other firms in an
industry in order to enhance market power and gain valuable assets
turnaround strategy - Answer-a strategy that reverses a firm's decline in performance
and returns it to growth and profitability
To create a competitive edge companies need to focus on ________________ -
Answer-customers' evolving wants and needs
Differentiation is perceived from the____________ - Answer-client/customer
Differentiated goods are the opposite of__________ - Answer-luxury goods
Luxury goods are only for__________. Differentiated goods are marketed to
____________ - Answer-a niche group of people; everyone
Corporate Level Strategies are also known as____________ - Answer-
growth/expansion strategy
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