Which of the Following Statements About Declining Industries Is True

question 6

Multiple Choice

Which of the following statements about declining industries is true?

• A) Not all segments of an industry typically decline at the same rate.
• B) A declining industry should ideally use the leadership strategy when it does not have any strengths and the competition is low.
• C) A divestment strategy is when a company in a declining industry tries to improve sales by improving product quality.
• D) The greater the exit barriers of a declining industry, the lower the intensity of competition.
• E) The intensity of competition is lower in declining industries that sell commodity-like products.

---

Definitions:

Depreciation Rate

The percentage or method used annually to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Salvage Value

The estimated residual value of an asset after the asset has reached the end of its useful life.

Equipment Purchase

The acquisition of physical assets like machinery, computers, or production tools for business operations, often involving capital expenditure.

Special One-Time Charge

A non-recurring expense or fee recorded in a company's financial statements, typically related to restructuring or significant adjustments.