Scenario 12

question 108

Multiple Choice

Scenario 12.1 Use the following to answer the questions.
Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for making reduced-fat snacks that taste cheesier and stay fresh longer. Cheetos introduced Fat-free Crunchies in limited markets in 2012 and began national distribution in 2013.
About 18 months later, a series of competitors' ads was run claiming that Cheetos Crunchies actually contained 1.5 grams of fat, and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took out the preservatives, and improved the taste.
Refer to Scenario 12.1. In 2012, Cheetos was in which phase of new-product development?

• A) Idea screening
• B) Product development
• C) Test marketing
• D) Business analysis
• E) Idea generation

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Definitions:

Vertical Acquisition

A corporate strategy where a company acquires another company that operates in the production process of the same industry, either as a supplier or distributor.

Conglomerate Acquisition

A type of corporate takeover where a large, multi-industry company acquires another business that may be in an unrelated industry.

Forward Acquisition

A strategy involving the purchase of a company with the aim of gaining access to its assets, technology, or market position in the future.

Stock Exchange Bid

The highest price that a buyer is willing to pay for a stock on the stock exchange at a given time.