Question

Apple has been known to sell its products at higher rates than competitors, such as Microsoft, as it has been successful at convincing consumers that Apple products are special and more luxurious in comparison. By accomplishing this, Apple has gained:

a. multipoint competition.

b. market power.

c. corporate-level core competencies.

d. brand awareness.

Which of the following is an advantage of pursuing diversification by entering into a greenfield venture?

a. By taking advantage of intangible resources, such as experience and knowledge of a firm, a new business can be established independently with instant ability to create value using those resources.

b. By taking advantage of tangible resources, such as extra machinery, a new business can establish itself without paying the initial costs of machinery.

c. By taking advantage of tangible resources through a greenfield venture, a business can claim to be environmentally friendly.

d. By taking advantage of tangible resources, such as experience and knowledge of a firm, a new business can be established independently with instant ability to create value using those resources.

A single-business diversification strategy and a dominant-business diversification strategy are both examples of what level of diversification?

a. Moderate to high level

b. Very high level

c. Low level

d. Very low level

Sandra is developing a competitor analysis for two florists. Which of the following information in the analysis will be the basis for predicting the competitors' behavior in the form of their competitive actions and responses?

a. Threats

b. Capabilities

c. Market commonality

d. Weaknesses

Answer 1

b. Market power is something that Apple has gained by accomplishing the level where it’s products are perceived as special and more luxurious. Whereas the remaining ones are not applicable in this context.

a. By taking advantage of intangible resources, such as experience and knowledge of a firm, a new business can be established independently with instant ability to create value using those resources is an advantage of pursuing diversification by entering into a greenfield venture. Whereas none of the remaining ones can be considered as an advantage in this context.

c. Low level of diversification is something both a single-business diversification strategy and a dominant-business diversification strategy exemplify. Whereas the remaining ones are not relevant in this context.

c. Market commonality is the information in the analysis that will be the basis for predicting the competitors' behavior in the form of their competitive actions and responses. The other information that could be the basis is resource similarity.

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