Price wars are most likely in a(n):
Answer(s): C
Price wars are more likely in the decline phase. Rivalry is more intense when the product is viewed as a commodity, fixed costs and exit barriers are high, firms have strategic reasons for remaining and the resources to do so, and firms are relatively equally strong. In this environment, firms are tempted to take ill-advised competitive actions because of uncertainty about their positions.
When uncertainty about an industry's future is greatest and other markets for the firm's assets are favorable, it should most likely follow a:
Answer(s): B
A quick divestment strategy assumes that the highest net recovery is obtained by sale early in the decline phase. It is then that uncertainty about the industry's future is greatest and other markets for the assets are most favorable. Indeed, divestiture may be indicated during the maturity phase prior to decline. But the firm risks being wrong about the onset of the decline phase. Quick divestment should be chosen when the industry structure is unfavorable, and the firm lacks strengths in the remaining pockets of demand.
High exit barriers may restrain firms from leaving an industry even though returns are poor.Which of the following is not an exit barrier?
Net liquidation value is reduced when the fixed costs of exit are high, e.g., the cost of labor settlements, payments to professionals involved in the divestiture (CPAs, attorneys, etc.), cancellation of contracts (with distributors, suppliers, managers, etc.), and resettlement orretraining. Moreover, announcement of exit may have such effects as reduced employee productivity, loss of customers, and a decline in supplier reliability. However, some required investments, such as in environmental safeguards, may be avoided. Thus, avoiding the capital investment in environmental safeguards maybe a reason to exit an industry if the investment exceeds the expected profits. This is an example of a fixed cost that is not an exit barrier.
Which strategy in a global industry is most likely to be facilitated by a transnational coalition?
Answer(s): D
Broad line global competition is competition over the full product line of the firm based on differentiation or low cost. The firm needs large resources for this long-term strategy. Governmental relations should emphasize impediment reduction. Transnational coalitions may be created to help the firms overcome impediments to executing the broader strategies, for example, market access or technology barriers.
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K.Tho Commented on October 05, 2023 Very helpful UNITED STATES
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