Which of the following is not a limit on emerging industry development?
Answer(s): B
Subsidies are a structural characteristic of an emerging market. If a subsidy is given by the government or other party, it usually assists the growth of the new industry instead of hindering it. Subsidies tend to focus on radically new technology or technology in which societal concern is strong.
Timing of entry into an emerging industry is a critical choice. Pioneering firms face high risk but low barriers. Which of the following is not a factor that favors early entry?
Answer(s): A
If the bases of competition and market segments will change significantly, an early entrant may lose the advantage obtained by being an early entrant. Other factors not favoring early entry include the following:(1) costs of opening the market are high and the benefits cannot be retained by the firm, (2) early competition will be expensive and larger and stronger competitors will emerge later, and (3) early products and processes will become obsolete.
Forecasting early and late markets is necessary to shape product development and marketing efforts and to predict structural evolution of an industry. Which factor is the most significant in obtaining customer acceptance of a new industry's product or service?
Answer(s): D
The nature of the benefit is the most significant factor. At one extreme, the benefit may consist of a performance advantage unattainable by other methods. At the other extreme, the benefit may be a pure cost advantage. Ordinarily, early markets purchase a product because it offers a performance advantage. Early markets tend to be suspicious of a product offering a cost advantage.
Industry structure and competition during the decline phase may result in intense and destructive competition. Which factor is most likely to contribute to this condition?
High exit barriers may restrain firms from leaving the industry even though their returns are poor. For example, specialized assets and inventory in a declining industry may have a low liquidation value. Few purchasers who wish to operate in the same industry may be available. Durable assets may have a carrying amount far greater than the liquidation value. Hence, liquidation may result in a loss that the firm may not wish to recognize. Furthermore, a low liquidation value means that the future discounted cash flows from remaining in the industry may exceed the opportunity cost of the capital invested in the declining industry. Thus, the returns from the proceeds of liquidation may be less than the returns from keeping those assets in the business.
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K.Tho Commented on October 05, 2023 Very helpful UNITED STATES
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