Some executives at Chevy want to increase the sales of the Camaro by adding exactly one of its new models to the line up. Which car could they add to do so? Why might adding this car help? If there are multiple cars they could add, please answer the questions for each possibility. Some other Chevy executives want to increase the sales of the Tahoe by adding exactly one of its new models to the line up. Which car could they add to do so? Why might adding this car help? If there are multiple cars they could add, please answer the questions for each possibility. What would have to be true about consumers' preferences and information for the strategy to increase sales of the Tahoe to succeed?

Management, Loose-Leaf Version
13th Edition
ISBN:9781305969308
Author:Richard L. Daft
Publisher:Richard L. Daft
Chapter10: Designing Organization Structure
Section: Chapter Questions
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2. Assume that consumers evaluate new cars on two features: Number of Cupholders (C),
and Sexiness of design (S). Chevrolet currently offers the following line-up of models:
• Chevy Camaro: C = 2, S = 7
• Chevy Tahoe: C = 6, S = 3
In addition, Chevrolet has the following new models that it could roll out, if necessary:
• Chevy Bolt: C = 3, S = 4
• Chevy Corvette: C = 1, S = 9
Chevy Malibu: C = 4, S = 3.5
• Chevy Colorado: C= 2, S= 5
• Chevy Suburban: C = 8, 8 = 1
(a) Some executives at Chevy want to increase the sales of the Camaro by adding
exactly one of its new models to the line up. Which car could they add to do so?
Why might adding this car help? If there are multiple cars they could add, please
answer the questions for each possibility.
(b) Some other Chevy executives want to increase the sales of the Tahoe by adding
exactly one of its new models to the line up. Which car could they add to do so?
Why might adding this car help? If there are multiple cars they could add, please
answer the questions for each possibility.
(c) What would have to be true about consuners' preferences and information for
the strategy to increase sales of the Tahoe to succeed?
(d) Now imagine Chevy adds all of its new models to the line up. What is likely to
be the most popular car? Why?
(e) Leslie is shopping for a new Chevy. When the dealer had the old line up (Camaro
and Tahoe) she was indifferent between the two. With the new line up with all the
cars, Leslie will choose either the Suburban or the Colorado. Write down Leslie's
choice correspondence under the two menus. Are her choices rational? Why
or why not?
(f) Mike is also shopping for a new Chevy. When the dealer had the old line up
(Camaro and Tahoe) he chose the Camaro. With the new line up with all the
cars, Mike will choose either the Tahoe, Malibu, or Bolt. Write down Mike's
choice correspondence for the two menus. Are his choices rational? Why or
why not?
Transcribed Image Text:2. Assume that consumers evaluate new cars on two features: Number of Cupholders (C), and Sexiness of design (S). Chevrolet currently offers the following line-up of models: • Chevy Camaro: C = 2, S = 7 • Chevy Tahoe: C = 6, S = 3 In addition, Chevrolet has the following new models that it could roll out, if necessary: • Chevy Bolt: C = 3, S = 4 • Chevy Corvette: C = 1, S = 9 Chevy Malibu: C = 4, S = 3.5 • Chevy Colorado: C= 2, S= 5 • Chevy Suburban: C = 8, 8 = 1 (a) Some executives at Chevy want to increase the sales of the Camaro by adding exactly one of its new models to the line up. Which car could they add to do so? Why might adding this car help? If there are multiple cars they could add, please answer the questions for each possibility. (b) Some other Chevy executives want to increase the sales of the Tahoe by adding exactly one of its new models to the line up. Which car could they add to do so? Why might adding this car help? If there are multiple cars they could add, please answer the questions for each possibility. (c) What would have to be true about consuners' preferences and information for the strategy to increase sales of the Tahoe to succeed? (d) Now imagine Chevy adds all of its new models to the line up. What is likely to be the most popular car? Why? (e) Leslie is shopping for a new Chevy. When the dealer had the old line up (Camaro and Tahoe) she was indifferent between the two. With the new line up with all the cars, Leslie will choose either the Suburban or the Colorado. Write down Leslie's choice correspondence under the two menus. Are her choices rational? Why or why not? (f) Mike is also shopping for a new Chevy. When the dealer had the old line up (Camaro and Tahoe) he chose the Camaro. With the new line up with all the cars, Mike will choose either the Tahoe, Malibu, or Bolt. Write down Mike's choice correspondence for the two menus. Are his choices rational? Why or why not?
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