Which of the Following Is NOT a Factor That Makes

question 104

Multiple Choice

Which of the following is NOT a factor that makes it appealing to diversify into a new industry by forming an internal startup subsidiary to enter and compete in the target industry?

• A) When internal entry is cheaper than entry via acquisition
• B) When a company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively
• C) When adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions
• D) When the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms
• E) When incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market

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Definitions:

Demand-oriented

Refers to pricing strategies that are based on the consumer's demand for a product or service.

Prestige Pricing

A pricing strategy where goods are priced higher than their objective market value to give them an appearance of luxury and quality.

Price Lining

is a pricing strategy where products are sold at a limited number of price points, each representing a distinct level of quality or features.

Odd-even Pricing

A pricing strategy involving setting prices so they end in an odd or even number to influence perception of value.