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17 Jan 2021, 23:30
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Question 1
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
74% (02:39) correct
26%
(02:31) wrong
based on 696
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
73% (01:03) correct 27%
(01:15) wrong
based on 670
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
46% (01:08) correct 54%
(01:08) wrong
based on 664
sessions
History
Date
Time
Result
Not Attempted Yet
The fact that a superior product can generate a competitive advantage for a company does not mean that every attempt at improving a product's quality will create such an advantage. Investments in product quality, like those in marketing and distribution, must be weighed against other types of investments with regard to direct, tangible benefits, such as increased profitability (including one or both of decreased costs and increased revenues) resulting from an investment. If a company is already competitive with others in the market in providing a product that is satisfactory to customers and avoids a negative reputation, then investment in increasing the quality of the product may be wasted because product quality, so long as it exceeds a minimum threshold, is rarely a primary factor for most customers in their buying decisions.
This concept was not understood by executives of one leading toy company, which failed to improve its competitive position, despite tremendous investment in strengthening the durability of its wooden toys. The toy company's executives did not recognize the leading role in which the brand names of their company and that of their primary competitors play in the buying decisions of their customers. As such, customers who are satisfied with a certain brand tend to remain loyal to that brand, despite changes in the quality of products made by that brand or any of its competitors. Similarly, they failed to analyze and properly understand the negative effects of an improvement in product quality, whereby their future purchases by customers loyal to their brand were actually cannibalized by the improved durability and extended lifespan of the newly improved toys. The only positive outcome of the improved product quality was the ability to easily market the toys to customers.
This concept was not understood by executives of one leading toy company, which failed to improve its competitive position, despite tremendous investment in strengthening the durability of its wooden toys. The toy company's executives did not recognize the leading role in which the brand names of their company and that of their primary competitors play in the buying decisions of their customers. As such, customers who are satisfied with a certain brand tend to remain loyal to that brand, despite changes in the quality of products made by that brand or any of its competitors. Similarly, they failed to analyze and properly understand the negative effects of an improvement in product quality, whereby their future purchases by customers loyal to their brand were actually cannibalized by the improved durability and extended lifespan of the newly improved toys. The only positive outcome of the improved product quality was the ability to easily market the toys to customers.
1. The discussion of the toy company in the second paragraph serves which of the following functions within the passage as a whole?
A. It describes in detail an exceptional case in which investment in the quality of a product actually failed to produce a competitive advantage.
B. It illustrates the potential problems of deciding to invest in the quality of a product at a time when investment is required more urgently in another area of the company.
C. It demonstrates the kind of analysis that executives apply when they select one kind of investment over another.
D. It supports the argument that investments in some aspects of product quality are more advantageous than investments in other aspects of a company.
E. It provides an example of the point about investment in product quality made in the first paragraph.
A. It describes in detail an exceptional case in which investment in the quality of a product actually failed to produce a competitive advantage.
B. It illustrates the potential problems of deciding to invest in the quality of a product at a time when investment is required more urgently in another area of the company.
C. It demonstrates the kind of analysis that executives apply when they select one kind of investment over another.
D. It supports the argument that investments in some aspects of product quality are more advantageous than investments in other aspects of a company.
E. It provides an example of the point about investment in product quality made in the first paragraph.
2. According to the passage, the toy company's executives failed to consider whether or not the product quality improvement ________
A. was overly complex to the point that it could not easily be described to potential customers in marketing materials.
B. would considerably improve the experience of the individuals who used the toy.
C. could be sustained if the number of toys manufactured was significantly increased.
D. could have an adverse effect on their sales in the future.
E. was sufficient to raise the product quality to a level comparable with that of its competitors.
A. was overly complex to the point that it could not easily be described to potential customers in marketing materials.
B. would considerably improve the experience of the individuals who used the toy.
C. could be sustained if the number of toys manufactured was significantly increased.
D. could have an adverse effect on their sales in the future.
E. was sufficient to raise the product quality to a level comparable with that of its competitors.
3. This primary purpose of this passage is to
A. compare potential positive and negative outcomes of a type of business investment.
B. suggest greater due diligence into a type of business investment.
C. illustrate a variety of cases in which a type of business investment could fail to achieve greater revenue.
D. analyze the general problems of a company caused by a certain type of business investment.
E. criticize the manner in which managers tend to consider costs and benefits of business investments.
A. compare potential positive and negative outcomes of a type of business investment.
B. suggest greater due diligence into a type of business investment.
C. illustrate a variety of cases in which a type of business investment could fail to achieve greater revenue.
D. analyze the general problems of a company caused by a certain type of business investment.
E. criticize the manner in which managers tend to consider costs and benefits of business investments.
RC Butler 2021 - Practice 2 RCs Daily.
Passage # 23 Date: 18-Jan-2021
This question is a part of RC Butler 2021. Click here for Details
Passage # 23 Date: 18-Jan-2021
This question is a part of RC Butler 2021. Click here for Details
The above question is a copy of this Official question!
18 Jan 2021, 00:52
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1.E
2. D
3. B
Waiting for the OA
Posted from my mobile device
2. D
3. B
Waiting for the OA
Posted from my mobile device
Jaya6
Joined: 09 Jan 2021
Last visit: 21 Jun 2022
Posts: 63
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Given Kudos: 142
Location: India
Schools: ISB '23 (S)
GPA: 3.2
21 Jan 2021, 21:38
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Gknight5603
Hello,
could you please explain the solution to the 3rd question?
