Business-level Strategy And The Industry Environment

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Question 1
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A fragmented industry is composed of a large number of small and medium-sized companies.

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Question 2
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Fragmented industries typically have high barriers to entry.

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Question 3
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By their choices of competitive actions and decisions about product attributes, managers can speed up or slow down the rate of progress of an industry through the stages of the industry life cycle.

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Question 4
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Relish Inc. created the first national chain of fast-food restaurants in a previously fragmented industry. This is called divestment.

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Question 5
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The franchisor typically owns and funds each of its franchisees.

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Question 6
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Alpha corporation owns and controls several retail outlets and is pursuing a strategy called franchising.

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Question 7
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Through chaining, companies increase their buying power, which allows them to negotiate large price reductions with their suppliers, which in turn promotes their competitive advantage.

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Question 8
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Franchisees essentially pursue independent strategies and do not use the business model of the franchisor.

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Question 9
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The challenge in a fragmented industry is to figure out the best set of strategies to overcome a fragmented market so that the competitive advantages associated with pursuing one of the different business models can be realized.

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Question 10
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A new product's relative advantage refers to the degree to which a new product is perceived as better at satisfying customer needs than the product that it supersedes.

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Question 11
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One characteristic of embryonic industries is unconventional and specialized distribution channels.

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Question 12
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Development of a mass market is the stimulus for an industry to change from growth to embryonic.

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Question 13
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Both innovators and early adopters are customers in the market while the industry is in its embryonic stage.

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Question 14
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Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.

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Question 15
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Different strategies are often required to support and strengthen a company's business model as a market develops over time.

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Question 16
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The late majority customers are typically reached through specialized distribution channels, and products are often sold by word of mouth.

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Question 17
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Laggards are the customers who are the first ones to try and adopt a new technology.

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Question 18
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Horizontal mergers often lead to industry fragmentation.

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Question 19
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Innovators and early adopters have very different customer needs from the early majority.

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Question 20
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Laggards are technologically sophisticated customers willing to tolerate the limitations of the product.

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