mqm_exam_2_solutions - EXAM 2 MQM 385 Student Name Student...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
EXAM 2: MQM 385 Student Name:_________________________________ Student Id:_____________________ Questions 1-3 are 10 points each (TOTAL 30 POINTS) 1. Explain why a company in a fragmented industry would want to consolidate the industry. Discuss the strategies that they might use to do this. ANS : Companies in a fragmented industry have many competitors, and the industry typically has low entry barriers and many small- to medium-sized competitors. Companies in a fragmented industry are often successful following a type of focus strategy. However, they may want to consolidate a fragmented industry and thus enjoy the higher profit potential from either a cost leadership or differentiation business model, both of which are successful in a consolidated industry. To both grow and consolidate their industry, companies have several options. First, they can choose chaining to establish networks of linked merchandising outlets that are interconnected in a way that allows them to operate as one large business. A second approach is franchising. With franchising, a company may be able to expand its market presence quickly and, because franchisees essentially own their own business, they are usually strongly motivated to make the companywide business model work. A third option for consolidating an industry is through horizontal mergers, which allow a company to obtain economies of scale and a larger market for their products. Finally, by using information technology (IT) and the Internet, a company can increase its market potential and greatly lower its costs. 2. What are technical standards, why are they important, and how are they established? ANS: Technical standards refer to a set of technical specifications that producers adhere to when making a product or a component of it. Battles to determine and control technical standards in a market are referred to as format wars. The outcome of these battles has huge implications because the winner often has won an important source of differentiation.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern