Hickory Divine Is One of the Leading Manufacturers in the Hardwood

question 80

Multiple Choice

Hickory Divine is one of the leading manufacturers in the hardwood furniture industry. Hickory Divine has many small competitors, none of which controls a significant portion of the industry. Hickory, like most of the furniture manufacturers, sells its products to a broad variety of small furniture stores throughout the country, none of which represents a large percentage of Hickory's sales. When purchasing the products it uses for manufacturing its furniture, Hickory is able to choose from many suppliers since the wood it uses is an undifferentiated commodity, and Hickory is able to easily switch to any supplier that has the best price and delivery times. While growth in the hardwood furniture industry has historically been in the double digits, the industry growth rate has slowed considerably into the single digits, to approximately 5% in recent years; consumers have been purchasing less expensive furniture made of composite wood that is considerably less expensive than hardwood furniture but that looks and functions very similarly once it is painted.
-The threat of suppliers in the hardwood furniture can best be described as

• A) low because there are a large number of suppliers selling an undifferentiated product.
• B) high because there are a large number of suppliers selling an undifferentiated product.
• C) moderate because the large number of suppliers is offset by the undifferentiated products they are selling.
• D) moderate because of the slowing growth rate in the industry and the commodity nature of the products produced by suppliers.

Recognize the role of personalization in enhancing sales pitch effectiveness.

Understand the use of countersuggestions in sales and their impact on customer decision-making.

Grasp the significance of customer testimonials, guarantees, and demonstrations as trust-building tools.

Differentiate between effective and ineffective sales presentation techniques.

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Definitions:

Profitability Ratios

Those ratios—gross profit rate, return on sales, return on total assets, and return on common stockholders’ equity—which measure a company’s ability to earn a profit.

Liquidity Ratios

The two ratios—current ratio and acid test ratio—which measure a company’s ability to pay off short-term debts.

Debt Management

The process of overseeing and controlling an individual's or organization's debt load through various strategies and planning.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (or assets, liabilities, and equity) is represented as a proportion of the total account.