Hashimodo Technologies Has Enjoyed Enormous Success with Its ID Touch

question 90

Multiple Choice

Hashimodo Technologies has enjoyed enormous success with its ID Touch Phone, which spurred brisk sales by first-time buyers for several years. Today, brand-name recognition is over 80 percent, and sales remain strong because existing users continue to purchase replacements. The CEO, Mr. Matsui, believes that in light of its profitability, improvements on the ID Touch Phone should remain the focal point of the company's efforts in coming years. However, his son Jiro, still just a junior manager, takes issue with this and says that Hashimodo should put all the resources it can into new product development, even if doing so results in losses for the next few quarters. Most likely Jiro is

• A)right, because the ID Touch Phone is clearly obsolete, and its sales are likely to diminish in the near future.
• B)wrong, because the company cannot afford to shift its focus from its winning number-one product.
• C)right, because the ID Touch Phone has reached a point where its customer base is no longer expanding.
• D)wrong, because the company cannot afford to experience several quarters of losses.

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