Chapter 11 Multiple Choice 1. Ikea, the Swedish furniture chain, insists that all its stores carry the basic product line with little room for adaptation to local tastes. If research of the U.S. market showed that Americans preferred larger beds than their Swedish counterparts, which of the following strategies would be advisable to Ikea? a. standardization. b. new product development. c. adaptation. d. withdraw from market. e. lower prices to encourage attitude change. Answer: (c) Difficulty: (1) Knowledge: (A) Page: 349 2. In the Australian market, rather than manufacturing disposable diapers, Proctor & Gamble decided to import them since the size of the market …show more content…
If a company were to follow a strategy of product and communications adaptation (dual adaptation) in a foreign market, an example of a product category that would fit this strategy would be __________________. a. soft drinks b. motorscooters c. gasoline d. clothing e. hand-powered washing machines Answer: (d) Difficulty: (3) Knowledge: (A) Page: 351, Exhibit 11-1 10. If a company is an early entrant in the global arena and wishes to spend much in the way of resources, they will probably chose _____________________ as a method of entry. a. product and communication extension--dual extension b. product invention c. product extension--communications adaptation d. product adaptation--communications extension e. product and communications adaptation--dual adaptation Answer: (a) Difficulty: (1) Knowledge: (F) Page: -351-352, Exhibit 11-1 11. As a strategy, ____________________ will work when the company targets a “global” segment with similar needs. a. product and communication extension--dual extension b. product invention c. product extension--communications adaptation d. product adaptation--communications extension e. product and communications adaptation--dual adaptation Answer: (a) Difficulty: (2) Knowledge: (F) Page: 351-352 12. The biggest advantage of a
2. New bank credit facility, 600 million cash on hand to take advantage of opportunities that may arise
1. What is their business strategy to grow profitably and compete over the long term?
Bryan Prince Bookseller is an independent bookstore and was founded by Bryan Prince in 1989 (Arnold, 2011). It carried two purposes and they include, commemorating books and constructing a community. Bryan Prince remained the owner of the bookstore until retirement in 2011 (Arnold, 2011). The owners of this bookstore now include Tracy Higgins and Kerry Cranston-Reimer (Arnold, 2011). This bookseller obtained the Canadian Booksellers Association Libris Awards for Best Bookstore in Canada in 2001 and was a close winner for the awards again in 2012 (BryanPrinceBookseller, 2015).
a. Do you think that either the acquisition of a foreign firm or licensing will result in greater growth for an MNC? Which alternative is likely to have more risk?
5. Should the company seriously consider any other options besides doing a spin-off or issuing targeted stock?
5. If Marriott used a signle corporate hurdle rate for evaluating investment opportunities in each of its lines of business, what would happen to the company over time?
Huggies versus Pampers is a dilemma many mothers face standing in the aisles as they ponder what is most cost effective, the most leak protective or simply the better product. These are two of the most popular brands of disposable brands. They are comparable in concept, price and variety. Huggies is a brand of Kimberly-Clark, INC. Pampers is a brand of Proctor & Gamble, Company. They both share a significant percent of the global market. We must take a look at the companies themselves to understand the success if the products
P&G originally operated in the US in the form of product division management in order to facilitate nationwide brands.
Since Sears “Elements” products can only be purchased through a catalogue and can not be viewed in store, it is advantageous that IKEA informs consumers that all items shown in the catalogue are available in store. This will greatly appeal to existing and new customers and enable them to view the item before purchase.
When considering the proposed advertising program and technology upgrades, we have to ensure that the project will likely add value to the company, so we need to consider the return on investment versus the cost of capital. If the return on investment, measured by the net present value and internal rate of return, exceeds the cost of capital, the investment should be taken.
5. The company that you manage has invested $5 million in developing a new product, but the product is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $3 million. If it would cost $1 million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete the development?
Based in Denmark, IKEA International A/S is one of the world 's top retailers of furniture, home furnishings, and housewares. The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide. The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations. IKEA is characterized by its efforts to offer high-quality items at low prices. To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by
Ikea's success in the retail furniture industry can be attributed to its vast experience in the retail market and its ability to integrate both product differentiation and cost leadership strategies successfully.
5 What level of R&D investment would be required to help the industry diversify and develop new opportunities for its materials?