Mqm 385 Ch 6 Test 2

Front 1

fragmented industries

Back 1

one composed of a large number of small and medium sized companies

Front 2

reasons for fragmented industries

Back 2

low barriers to entry due to lack of economies of scale

low entry barriers permit constant entry by new companies

specialized customer needs require small job lots of products - no mass production

dis economies of scale

Front 3

fragmented industries strategies

Back 3

chaining - linked outlets
franchising - reputation in management skills and economies of scale
horizontal merger - obtain economies and growth
It and internet - develop new business models

Front 4

Embryonic industry

Back 4

just beginning to develop when technological innovation creates new market or product opportunities

Front 5

growth industry

Back 5

first time demand is expanding rapidly as many new customers enter the market

Front 6

reasons for slow growth in market demand

Back 6

limited performance and poor quality of the first products

customer unfamiliarity

poorly developed distribution channels

lack of complementary products

high production costs

Front 7

mass markets typically start to develop when:

Back 7

technological progress makes a product easier to use and increase its value

key complementary products are developed

companies find ways to reduce production cost, therefor reducing price

Front 8

stages in the industry life cycle

Back 8

embryonic
growth
shakeout
mature
decline

Front 9

market development and customer groups

Back 9

innovators
early adopters
early majority
late majority
laggards

Front 10

market share or different customer segementds

Back 10

most market demand and industry profits arise during the early and late majority customer segments

roughly 75%

Front 11

embryonic stages

Back 11

share building strategies

requires capital to develop R and D
development of distinctive competencies and comp adv

Front 12

growth stages

Back 12

maintain relative competitive position

strengthen business model

Front 13

shakeout stage

Back 13

increase share during fierce competition

weak companies should exit the industry

Front 14

maturity stage

Back 14

hold and maintain to defend business model

dominant companies want to reap the reward of prior investments

Front 15

mature industry

Back 15

dominated by a small number of large companies whose actions are so highly interdependent that success of one company's strategy depends on the response of its rivals

Front 16

evolution of mature industries

Back 16

industry becomes consolidated as a result of the fierce competition during the shakeout stage

business level strategy is based on how establishes companies try to reduce strength of competition

interdependent companies try to protect industry profitability

Front 17

declining industry

Back 17

market demand has leveled off or is falling and the size of total market starts to shrink

competition tends to intensify and industry profits tend to fall

Front 18

reasons for and severity of the declining industries

Back 18

technological change, social trends, demographic shifts

Front 19

intensity of competition is greater when

Back 19

the decline is rapid versus slow
the industry has high fixed costs
the exit barriers are high
the product is perceived as a commodity

Front 20

niche

Back 20

focuses on pockets of demand that are declining more slowly