Month: October 2024

Which of the following statements about a product life cycle diagram is true?

Select ONE answer:

1. The life cycle diagram predicts when the decline phase will start
2. Sales growth always follows the introduction of a product
3. Profits are normally highest during the maturity phase
4. The mature phase usually lasts about 10 years

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > The maturity phase is the phase during which profits from the product are usually maximised
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The Stafford is a product manufactured by Alex pic.

Lucy, the product manager for the Stafford is pleased that its dominant market share has been maintained for over five years but is concerned that market growth has now almost ceased.

The product manager does not believe that the product is worthy of any further significant financial support.

In these circumstances and in terms of the Boston Consulting Group Matrix, Lucy should be recommending which of the following strategies?

Select ONE answer:

1. Hold
2. Harvest
3. Divest
4. Build

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > With a high market share in a low/no growth market, the Stafford is clearly a Cash Cow. The two strategy options are Hold (which implies continuing to support the product financially to maintain its position) or Harvest (which implies running down investment in the product and just managing the product for cash flow during its final years). Lucy appears to rule out the Hold strategy (withdraw investment), hence Harvest is the key.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The board of directors of Alex plc are currently considering whether to pursue a new strategy in respect of one of their major strategic business units.

When evaluating a strategic option in this way, the final decision on whether to pursue the strategy or not should be judged against which ONE of the following criteria?

Select ONE answer:

1. A cost of entry test
2. An attractiveness test
3. A feasibility test
4. A payoffs test

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Gerry Johnson and Kevan Scholes recommend evaluating strategies against the following criteria: Suitability – does the strategy fit the strengths, objectives and image of the company? Feasibility – does the company have the necessary resources to pursue the strategy effectively? Acceptability – is the strategy acceptable to the company’s
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The board of directors of Alex plc are currently considering whether to pursue a new strategy in respect of one of their major strategic business units.

When evaluating a strategic option in this way, the final decision on whether to pursue the strategy or not should be judged against which ONE of the following criteria?

Select ONE answer:

1. A cost of entry test
2. A suitability test
3. An attractiveness test
4. A payoffs test

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > Gerry Johnson and Kevan Scholes recommend evaluating strategies against the following criteria: Suitability – does the strategy fit the strengths, objectives and image of the company? Feasibility – does the company have the necessary resources to pursue the strategy effectively? Acceptability – is the strategy acceptable to the company’s
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.