Question

66. An industry analysis for manufacturers of a small personal care gadget observed the following characteristics:

1. Industry sales have grown at 15-20% per year in recent years are expected to grow at 10-15% per year over the next three years, still well above the economic growth rate.
2. Some U.S. manufacturers are attempting to enter fast growing non-U.S. markets, which remain largely unexploited.
3. Some manufacturers have created a new niche in the industry by selling directly to customers through mail order. Sales for this industry segment are growing at 40% per year.
4. The current penetration rate in the U.S. is 60% of households and will be difficult to increase.
5. Manufacturers compete fiercely on the basis of price, and price wars within the industry are common.
6. Some manufacturers are able to develop new, unexploited niche markets in the U.S. based on company reputation, quality, and service.
7. Several manufacturers have recently merged, and it is expected that consolidation in the industry will increase.
8. New manufacturers continue to enter the market

Characteristics _______ would be typical of an industry that is in the start-up stage.
A. 4 and 7
B. 1 and 4
C. 2 and 5
D. none of the characteristics listed match the start-up stage

Answer 1

The characteristics provided for the industry analysis do not match those typically seen in the start-up stage of an industry's development, leading to the conclusion that the correct MCQ answer is D. none of the characteristics listed match the start-up stage.

Step-by-step explanation:

When analyzing an industry's stage of development, certain characteristics are indicative of specific phases such as the start-up, growth, maturity, and decline stages. In the scenario described for an industry analysis of small personal care gadget manufacturers, there are several key observations:

High growth in industry sales

Attempts to enter unexploited non-U.S. markets

A growing niche via direct sales to customers

A high penetration rate in U.S. households that is challenging to increase

Fierce competition on price

Development of new markets based on reputation, quality, and service

Industry consolidation through mergers

Continuous entry of new manufacturers to the market

Characteristics associated with the start-up phase typically involve rapid growth and a lower level of market penetration. Therefore, options B and C do not fully represent the start-up stage. Options A and D involve industry consolidation and a high market penetration, which are more indicative of a mature industry. Thus, the provided characteristics do not correspond with the start-up stage of an industry.

In conclusion, the correct MCQ answer for the given scenario is D. none of the characteristics listed match the start-up stage.