Potential benefits of adopting focused product strategy

Assignment Help Operation Management

Reference no: EM132302137

1. As a manufacturer of compressible thermal bottles, which below is your capability as opposed to a resource?

A) Your patents

B) The prime locations of your retail stores

C) Your factories

D) Your ability to conduct R&D cheaply

2. Which below are potential benefits of adopting a focused product strategy (i.e., product specialization)?

Faster accumulation of experience and growth of learning curve

Ability to realize economies of scale (more quickly)

Ability to realize economies of scope (faster)

Potential to exploit geographical transportational density

3. To compete, you developed a new patent which enhances the insulation effectiveness of the compressible thermal bottles (CTBs). As such, you raise the price to $100, which is $10 more than the prior generation of CTBs currently being sold in the market. While the per unit cost for prior generation of CTBs is $20, the cost to make CTBs of the new generation is $40. For a given customer (say John), somehow it is found out that his perceived benefits are $130 and $120 for new and old generations of CTBs, respectively. Which statement below is true?

The customer will prefer the new generation CTBs because of higher consumer surplus

The customer will prefer the old generation CTBs because of higher producer surplus

You adopted the benefit leadership strategy

Your new patent-protected product has cost advantage

4. Because compressible thermal bottles (CTBs) are not necessities (most people are fine with regular bottles), the market features highly elastic price elasticity of demand. Your new patent enhances the insulation effect, thus creating a new generation of CTBs that keep internal temperature undisturbed for much longer. The best way to compete and grab market share using this new product against old generation CTBs is likely:

Charge same or nearly the same price as old generation CTBs; market share automatically increases due to the inherently better quality of new CTBs

Charge a substantially higher price to match the inherently higher quality; this will increase profitability which allows investment of extra profits to capture greater market share through, for example, advertising campaigns or more R&Ds

Start a price war by cutting price aggressively. As the market has high price elasticity, price cutting will substantially increase sales volume and thus market share

Making the patent free-to-use so that competitors can produce new generation CTBs, which are more costly to produce, thus reducing competitors' profits and their market shares.

5. Suppose your compressible thermal business utilizes a special type of plastic as a raw material to make your bottles. This kind of plastic is not used by other competitors because they lack the patented technology. Which term below describes your business?

Monopolist

Cartelist

Monopsonist

Oligopsonist

Reference no: EM132302137

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