Company CCC Is an Automotive Component Manufacturer

question 25

Multiple Choice

Company CCC is an automotive component manufacturer. It manufactures three main products within its portfolio: Product 1: Relative market share of 0.1; Market growth rate of -2% Product 2: Relative market share of 4.0; Market growth rate of +3% Product 3: Relative market share of 0.3; Market growth rate of +15% Which TWO of the following statements are CORRECT? (Choose two.)

• A) Product 2 is likely to be at the mature stage of its life cycle, is likely to benefit from significant economies of scale.
• B) Product 3 is likely to be at the growth stage of its life cycle, at high risk of failure and further investment should be considered.
• C) Product 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.
• D) Product 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.
• E) Product 1 is    likely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.

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