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Established companies concentrate on defending what they already have.

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Established companies concentrate on defending what they already have. [#permalink]

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New post Updated on: 27 Jan 2018, 07:42
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Difficulty:

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Question Stats:

68% (01:17) correct 32% (02:06) wrong based on 339 sessions

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The Official Guide for GMAT Review, 10th Edition, 2003

Practice Question
Question No.: CR 38
Page: 508

Which of the following best completes the passage below?

Established companies concentrate on defending what they already have. Consequently, they tend not to be innovative themselves and tend to underestimate the effects of the innovations of others. The clearest example of this defensive strategy is the fact that __________.

(A) ballpoint pens and soft-tip markers have eliminated the traditional market for fountain pens, clearing the way for the marketing of fountain pens as luxury or prestige items

(B) a highly successful automobile was introduced by the same company that had earlier introduced a model that had been a dismal failure

(C) a once-successful manufacturer of slide rules reacted to the introduction of electronic calculators by trying to make better slide rules

(D) one of the first models of modern accounting machines, designed for use in the banking industry, was purchased by a public library as well as by banks

(E) the inventor of a commonly used anesthetic did not intend the product to be used by dentists, who currently account for almost the entire market for that drug

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Originally posted by carcass on 22 Jan 2017, 09:17.
Last edited by hazelnut on 27 Jan 2018, 07:42, edited 2 times in total.
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Re: Established companies concentrate on defending what they already have. [#permalink]

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New post 23 Jan 2017, 01:39
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carcass wrote:
Which of the following best completes the passage below?

Established companies concentrate on defending what they already have. Consequently, they tend not to be innovative themselves and tend to underestimate the effects of the innovations of others. The clearest example of this defensive strategy is the fact that___.

A. ballpoint pens and soft-tip markers have eliminated the traditional market for fountain pens, clearing the way for the marketing of fountain pens as luxury or prestige items

B. a highly successful automobile was introduced by the same company that had earlier introduced a model that had been a dismal failure

C. a once-successful manufacturer of slide rules reacted to the introduction of electronic calculators by trying to make better slide rules

D. one of the first models of modern accounting machines, designed for use in the banking industry, was purchased by a public library as well as by banks

E. the inventor of a commonly used anesthetic did not intend the product to be used by dentists, who currently account for almost the entire market for that drug.


A. clearly an opposite example, it is not a defensive strategy
B. irrelevant - does not follow the same line of reasoning of competitor vs. competitor
C. correct - shows competitor (new electronic calculator) vs. competitor (slide ruler) example
D. irrelevant - it's competitor vs. competitor, banking and public library is a bit too far-fetched to be competitors.
E. irrelevant - it's competitor vs. competitor
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Re: Established companies concentrate on defending what they already have. [#permalink]

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New post 23 Jan 2017, 10:31
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carcass wrote:
Which of the following best completes the passage below?

Established companies concentrate on defending what they already have. Consequently, they tend not to be innovative themselves and tend to underestimate the effects of the innovations of others. The clearest example of this defensive strategy is the fact that___.

A. ballpoint pens and soft-tip markers have eliminated the traditional market for fountain pens, clearing the way for the marketing of fountain pens as luxury or prestige items
B. a highly successful automobile was introduced by the same company that had earlier introduced a model that had been a dismal failure
C. a once-successful manufacturer of slide rules reacted to the introduction of electronic calculators by trying to make better slide rules
D. one of the first models of modern accounting machines, designed for use in the banking industry, was purchased by a public library as well as by banks
E. the inventor of a commonly used anesthetic did not intend the product to be used by dentists, who currently account for almost the entire market for that drug.


Choice C correctly says that the manufacturer was defending the already existing slide rules without innovating.
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Re: Established companies concentrate on defending what they already have. [#permalink]

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New post 27 Jan 2017, 22:57
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three things that established companies do -
1. Concentrate on defending what they have.
2. Not innovative
3. Underestimate the effects of others' innovations.

the correct answer must parallel the reasoning above-

Option A - Incorrect.
Innovation need not necessarily be coming up with a ground-breaking product. It can also be through innovative marketing and positioning the product.
Hence, this does not agree with point #2.

Option B - Incorrect.
No comparison between the company's products to an innovative product from competitors.
Highly successful does not mean that the company was not innovative.
Hence, this does not agree with points #2.

Option C - Correct Answer.
trying to make better slide rules (Point #1).
not innovative because they did not introduce new technologies but defended the old one.
By doing this, they underestimated the effects of others innovations. Hence, they were no longer successful(point #3).

Option D - Incorrect.
does not address any of the three points.

Option E - Incorrect.
does not address any of the three points.
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Re: Established companies concentrate on defending what they already have. [#permalink]

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New post 19 Aug 2017, 21:36
carcass wrote:
Which of the following best completes the passage below?

Established companies concentrate on defending what they already have. Consequently, they tend not to be innovative themselves and tend to underestimate the effects of the innovations of others. The clearest example of this defensive strategy is the fact that __________.

(A) ballpoint pens and soft-tip markers have eliminated the traditional market for fountain pens, clearing the way for the marketing of fountain pens as luxury or prestige items

(B) a highly successful automobile was introduced by the same company that had earlier introduced a model that had been a dismal failure

(C) a once-successful manufacturer of slide rules reacted to the introduction of electronic calculators by trying to make better slide rules

(D) one of the first models of modern accounting machines, designed for use in the banking industry, was purchased by a public library as well as by banks

(E) the inventor of a commonly used anesthetic did not intend the product to be used by dentists, who currently account for almost the entire market for that drug


C illustrates the strategy described in the syllabus more precisely than A. A simply suggests that a product has become antiquated- but "B" is more accurate because a "once-successful" implicitly lost business because it tried to make more of the same product.
Re: Established companies concentrate on defending what they already have.   [#permalink] 19 Aug 2017, 21:36
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Established companies concentrate on defending what they already have.

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