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Ekland
Joined: 15 Oct 2015
Last visit: 30 Apr 2023
Posts: 355
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Concentration: Finance, Strategy
Schools: Alberta"19 Fordham '18 Schulich Jan '18 Desautels '19 Haskayne(Calgary) Jindal '19 Owen '19 Olin '19 (I) Queens"18
GPA: 3.93
WE:Account Management (Education)
Updated on: 06 Sep 2019, 08:53
Originally posted by Ekland on 13 Feb 2016, 06:46.
Last edited by Sajjad1994 on 06 Sep 2019, 08:53, edited 5 times in total.
Last edited by Sajjad1994 on 06 Sep 2019, 08:53, edited 5 times in total.
Updated - Complete topic (435).
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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.
According to the passage, investments in product quality are comparable to investments in marketing and distribution in terms of their
A ability to measure the direct results they produce
B increased revenues they eventually produce
C manner in which they should be analyzed
D insufficient basis upon which executives research them
E level of competitive advantage they provide to a company
A ability to measure the direct results they produce
B increased revenues they eventually produce
C manner in which they should be analyzed
D insufficient basis upon which executives research them
E level of competitive advantage they provide to a company
The passage suggests which of the following about the quality of the product produced by the toy company prior to its investment in enhancing that product quality?
A. It enabled the toy company to satisfy customers at an acceptable rate.
B. It would likely weaken the toy company's competitive position with respect to other leading toy companies.
C. It had already been improved after it caused damage to the toy company's reputation in the past.
D. It was slightly better than that of the toy company's major competitors.
E. It needed to be improved to attain a similar level to that of the competing toy companies.
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.
The passage suggests that 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.
E. was sufficient to raise the product quality to a level comparable with that of its competitors.
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15 Jul 2016, 05:39
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According to the passage, investments in product quality are comparable to investments in marketing and distribution in terms of their
A ability to measure the direct results they produce
B increased revenues they eventually produce
C manner in which they should be analyzed
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
D insufficient basis upon which executives research them
E level of competitive advantage they provide to a company
The passage suggests which of the following about the quality of the product produced by the toy company prior to its investment in enhancing that product quality?
A. It enabled the toy company to satisfy customers at an acceptable rate.
>>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
B. It would likely weaken the toy company's competitive position with respect to other leading toy companies.
C. It had already been improved after it caused damage to the toy company's reputation in the past.
D. It was slightly better than that of the toy company's major competitors.
E. It needed to be improved to attain a similar level to that of the competing toy companies.
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.
>>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.
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.
The passage suggests that 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.
>>Similarly, they failed to analyze and properly understand the negative effects of an improvement in product quality,
E. was sufficient to raise the product quality to a level comparable with that of its competitors.
A ability to measure the direct results they produce
B increased revenues they eventually produce
C manner in which they should be analyzed
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
D insufficient basis upon which executives research them
E level of competitive advantage they provide to a company
The passage suggests which of the following about the quality of the product produced by the toy company prior to its investment in enhancing that product quality?
A. It enabled the toy company to satisfy customers at an acceptable rate.
>>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
B. It would likely weaken the toy company's competitive position with respect to other leading toy companies.
C. It had already been improved after it caused damage to the toy company's reputation in the past.
D. It was slightly better than that of the toy company's major competitors.
E. It needed to be improved to attain a similar level to that of the competing toy companies.
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.
>>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.
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.
The passage suggests that 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.
>>Similarly, they failed to analyze and properly understand the negative effects of an improvement in product quality,
E. was sufficient to raise the product quality to a level comparable with that of its competitors.
17 Nov 2017, 23:45
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about question 4
the passage says that: The only positive outcome of the improved product quality was the ability to easily market the toys to customers.
so why answer d is correct?
the passage says that: The only positive outcome of the improved product quality was the ability to easily market the toys to customers.
so why answer d is correct?
