WPC 480: Chapter 7-12 Quiz UPDATED
ACTUAL Questions and CORRECT
Answers
Which of the following scenarios would be characteristic of an entrepreneur? - CORRECT
ANSWER - John implemented a new and more efficient way to produce pottery.
Which of the following statements is true of the early majority section of consumers? -
CORRECT ANSWER - They weigh the benefits and costs carefully when adopting a new
product.
Which of the following describes the group of customers referred to as the early majority? -
CORRECT ANSWER - They come into the market during the shakeout stage.
The type of customers vital to a firm introducing a new innovation are the________, who are
willing to buy early into new technology or product concept. - CORRECT ANSWER -
early adopters
The strategic objective of a first mover during the introduction stage of the industry life cycle is
to - CORRECT ANSWER - achieve market acceptance
In the context of the Boston Consulting Group (BCG) growth-share matrix, if one of the strategic
business units of a conglomerate is categorized under "dog," the management should consider -
CORRECT ANSWER - divesting the strategic business unit.
The managers at Acme Corporation decided that their firm needed to diversify because of overall
falling sales and lower performance in one sector. How does diversifying compensate for the
declining performance in this sector? - CORRECT ANSWER - by having higher
performance in another sector - Firms often attempt to reduce risk by diversifying their product
and service portfolio through competing in a number of different industries. The rationale behind
these diversification moves is that falling sales and lower performance in one sector might be
compensated by higher performance in another.
, Which of the following best illustrates forward vertical integration? - CORRECT
ANSWER - A firm that manufactures and sells car engines to major automobile companies
launches its own line of cars. - Forward vertical integration involves moving ownership of
activities closer to the end customer.
U.S.-based consumer electronics corporation DGM owns a smaller company in Taiwan where
most of DGM's cell phone technology is made before being released worldwide. Which of the
following alternatives to integration does this best illustrate? - CORRECT ANSWER -
parent-subsidiary relationship
J-Texon Manufacturing is a large conglomerate that operates only in its home country. The
company competes in industries like the consumer electronics, health care, hotel, airlines,
education, and steel industries. Which of the following diversification strategies does this best
illustrate? - CORRECT ANSWER - product diversification - A firm that is active in
several different product markets is pursuing a product diversification strategy.
It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or
the European Commission to approve any large horizontal integration activity because -
CORRECT ANSWER - the horizontal integration activity has the potential to reduce
competitive intensity in an industry.
Lana Dubois Inc. is a large skincare company that made an initial small investment in a startup
company, Greener Tan, which was developing an organic sunscreen. This gave Lana Dubois
controlling interests in the startup company. However, Greener Tan soon began to have financial
difficulties because of principal-agent problems. As a result, Lana Dubois did not invest in the
next stage of development and pulled out of the company. This approach to strategic alliance is
referred to as a - CORRECT ANSWER - real-options perspective - breaks down a larger
investment decision into a set of smaller decisions that are staged sequentially over time. This
approach allows the firm to obtain additional information at predetermined stages. At each stage,
after new information is revealed, the firm evaluates whether to make further investments.
Codehow Inc. is a large firm involved in the highly competitive market of high-tech medical
equipment. In this market, promising startups that focus on research are constantly entering the
market with new technological developments. Which of the following approaches would best
ACTUAL Questions and CORRECT
Answers
Which of the following scenarios would be characteristic of an entrepreneur? - CORRECT
ANSWER - John implemented a new and more efficient way to produce pottery.
Which of the following statements is true of the early majority section of consumers? -
CORRECT ANSWER - They weigh the benefits and costs carefully when adopting a new
product.
Which of the following describes the group of customers referred to as the early majority? -
CORRECT ANSWER - They come into the market during the shakeout stage.
The type of customers vital to a firm introducing a new innovation are the________, who are
willing to buy early into new technology or product concept. - CORRECT ANSWER -
early adopters
The strategic objective of a first mover during the introduction stage of the industry life cycle is
to - CORRECT ANSWER - achieve market acceptance
In the context of the Boston Consulting Group (BCG) growth-share matrix, if one of the strategic
business units of a conglomerate is categorized under "dog," the management should consider -
CORRECT ANSWER - divesting the strategic business unit.
The managers at Acme Corporation decided that their firm needed to diversify because of overall
falling sales and lower performance in one sector. How does diversifying compensate for the
declining performance in this sector? - CORRECT ANSWER - by having higher
performance in another sector - Firms often attempt to reduce risk by diversifying their product
and service portfolio through competing in a number of different industries. The rationale behind
these diversification moves is that falling sales and lower performance in one sector might be
compensated by higher performance in another.
, Which of the following best illustrates forward vertical integration? - CORRECT
ANSWER - A firm that manufactures and sells car engines to major automobile companies
launches its own line of cars. - Forward vertical integration involves moving ownership of
activities closer to the end customer.
U.S.-based consumer electronics corporation DGM owns a smaller company in Taiwan where
most of DGM's cell phone technology is made before being released worldwide. Which of the
following alternatives to integration does this best illustrate? - CORRECT ANSWER -
parent-subsidiary relationship
J-Texon Manufacturing is a large conglomerate that operates only in its home country. The
company competes in industries like the consumer electronics, health care, hotel, airlines,
education, and steel industries. Which of the following diversification strategies does this best
illustrate? - CORRECT ANSWER - product diversification - A firm that is active in
several different product markets is pursuing a product diversification strategy.
It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or
the European Commission to approve any large horizontal integration activity because -
CORRECT ANSWER - the horizontal integration activity has the potential to reduce
competitive intensity in an industry.
Lana Dubois Inc. is a large skincare company that made an initial small investment in a startup
company, Greener Tan, which was developing an organic sunscreen. This gave Lana Dubois
controlling interests in the startup company. However, Greener Tan soon began to have financial
difficulties because of principal-agent problems. As a result, Lana Dubois did not invest in the
next stage of development and pulled out of the company. This approach to strategic alliance is
referred to as a - CORRECT ANSWER - real-options perspective - breaks down a larger
investment decision into a set of smaller decisions that are staged sequentially over time. This
approach allows the firm to obtain additional information at predetermined stages. At each stage,
after new information is revealed, the firm evaluates whether to make further investments.
Codehow Inc. is a large firm involved in the highly competitive market of high-tech medical
equipment. In this market, promising startups that focus on research are constantly entering the
market with new technological developments. Which of the following approaches would best
