GSL M4 – Module Quiz 1
YOU SCORED 6 OUT OF A POSSIBLE 10 [60%]
Question 1 Marks: 1
Pod Protein is an Australian sports supplements supplier. Red King manufactures and
distributes tomato sauce. Nutrient Water is an Australian drinks company and distributes
its product in bottles. Fender guitars is a high end US guitar manufacturer and distributor.
Which of the following is a product development strategy?
Answer Options
You answered A. The correct answer is A
USER SELECTION CORRECT ANSWER
The release of new recyclable plastic easy to squeeze bottles for Red King
A
tomato sauce.
Fender guitars releasing a limited edition Eric Claptop signed Fender
B
stratocaster guitar.
The launch of a new 1.2L bottle for Nutrient Water to supplement its existing
C
600ml bottle.
The acquisition by Pod protein of four gymnasiums, where they will also be
D
able to sell supplements directly to members.
Answer Explanation
A is correct because the company has developed new packaging that is significantly
different as it is plastic, recyclable and with a non-drop cap. The packaging is a new
product development strategy.
B is incorrect because the Fender guitar is no different to other Fender guitars, apart from
the famous Eric Clapton's name being associated with it. Therefore it is market
penetration. There is nothing in the statement that allows us to conclude there is product
development occurring.
C is incorrect because introducing a new large bottle size is another example of a market
penetration strategy.
D is incorrect because acquiring gyms means that Pod is looking to find new customers
for their products, but they are also now operating gyms which requires different
resources and capabilities. This is an example of diversification.
Module: 4 > 4.2 New product, service and market development >
Page: 214,219-220
Question 2 Marks: 1
Which of the following is an example of a diversification strategy?
Answer Options
You answered C. The correct answer is C
USER SELECTION CORRECT ANSWER
A A soft drink company releases fully recycled packaging.
B A Swedish furniture company launches stores in Mumbai and Delhi.
C A German supermarket enters China with a chain of fast food stores.
D A US motorcycle company starts a motorcycle personal finance business.
Answer Explanation
C is correct because they have launched a new product (fast food stores) in a new market
(China).
A is incorrect because launching new packaging is likely a product development strategy.
There is no evidence that they are targeting a new customer group.
B is incorrect because selling their existing products in a new country is an example of
market development strategy.
D is incorrect because they have started a new product, but likely to the same customer
base they have now. It is product development but not diversification.
Module: 4 > 4.2 New product, service and market development >
Diversification > Page: 222-223
Question 3 Marks: 0
Car Next Door was founded to provide a cost-effective alternative to expensive car hire
through a large company like Hertz. An online model only, Car Next Door paid members of
the public to hire out their cars for as little as one hour and took a small fee for managing
the transaction. Renters could find a car much closer to their location and didn’t need to
physically interact with Car Next Door or the car owner.
Considering the 10 types of innovation, which of the following best describes Car Next
Door’s business model?
Answer Options
You answered A. The correct answer is C
USER SELECTION CORRECT ANSWER
They built a brand and new channel that beat the incumbents at their business
A
model.
They leveraged the offering through increased product performance and the
B
product system.
They delivered new configuration through providing a new network, structure
C
and profit model.
They extended the network of car ownership to mobilise resources and then
D
scale the product offering.
Answer Explanation
C is correct because the question points to a different strategy where Car Next Door
exploited the network effect of car ownership, developed a new profit model where they
acted as a "transaction maker" rather than owning assets and renting them; and
developed a structure and processes that were online, with limited touch points and are
efficient. This all relates to the configuration innovation group as part of the 10 types of
innovation.
A is incorrect because the question is not about building a brand to beat incumbents. Their
online channel is not unique (you can rent a Hertz car online).
B is incorrect because this is not about product performance. Instead, it is about profit
models, networks and processes. There is an element of a different product system but
option C much better answers the question.
D is incorrect because this is discussing strategic and organisational success factors for
innovation, rather than the 10 types of innovation. The company did leverage the network
of car ownership but it isn't about mobilising their resources and scaling (although that
might be important later on).
Module: 4 > Innovation > Innovation in business > Page: 209-210
Question 4 Marks: 0
Disney+ was first available in the Netherlands, but soon after released in the US, Australia,
New Zealand and Puerto Rico. The US is a large market but the latter three are much
smaller markets.
As part of Disney’s new product development process, which of the following describes
the most likely reason for choosing to release the product across Australia, New Zealand
and Puerto Rico?
Answer Options
You answered C. The correct answer is B
USER SELECTION CORRECT ANSWER
They were test marketing Disney plus to get feedback on customer use and
A
then modify and develop.
They were launching Disney+ in smaller markets where they could also
B
continue testing for small bugs and issues.
They were commercialising the product in smaller markets to test whether they
C
could quickly take subscribers and market share fro Netflix.
They were developing the product by comparing how the product was
D
received in both large and small markets to improve development efficiency.
Answer Explanation
To avoid students writing into the forum or Facebook, also read the FAQ because the
study guide says launch and in a suggested answer says commercialisation.
B is correct because the product launch was in the US, but also quickly moving to smaller
markets like Canada and The Netherlands. Next they launched Disney+ in countries like
AU, NZ and Puerto Rico. The case in the study guide as part of question 4.4 doesn't
specifically state why they chose these markets but does talk about ironing out technical
bugs. If the bugs were very annoying to customers, it would be annoying to a smaller
customer base!
A is incorrect because Disney had already performed test marketing in the Netherlands to
get detailed insights into how people would interact with Disney+ and use the service.
C is incorrect because commercialisation doesn't usually involve further testing for bugs
and issues, and commercialisation is generally a large rollout, which they did when they
went across Europe and then India, and then the world.
D is incorrect because Disney+ must have been already developed before they would
release it to market. Development efficiency is about having the right resources and
processes and not about how different markets receive the product.
Module: 4 > New product development > Question 4.4 > Page: 226-
230
Question 5 Marks: 0
Considering the components of service design, which of the following most accurately
describes UberEats?
Answer Options
You answered A. The correct answer is C
USER SELECTION CORRECT ANSWER
The service encounter is about ensuring that the purchase and delivery of
A
food meets the needs of consumers.
The touchpoints of the service, through online and the deliver of food form
B
part of the sociocultural configuration of the service.
As part of sociocultral configuration, the service suppliers must ensure food is
C
consistently delivered within an acceptable timeframe.
When Ubereats drivers meet the customer they must check that the customer
D
believes that the value of the service was sufficient to meet their needs.
Answer Explanation
C is correct because these aspects are an important part of sociocultural configuration.
The purpose of on-demand is to supply a product within a time frame. Once this is
achieved, customers become accustomed to that minimum time frame and in a sense, a
cultural norm is developed. We sometimes observe this when things change. For instance,
Uber rideshare was marketed on "get a car within 5 minutes". Years later, this timeframe
changed and there was a degree of customer backlash before they accepted the changed
service standard.
A is incorrect because meeting the needs of customers is related to the value co-creating
system.
B is incorrect because the service touchpoints are related to the service encounter and
not sociocultural configuration.
D is incorrect because it is not a service function of a delivery driver to check the
customers' needs were met. It is the whole service design and specifically, the value co-
creating system that does this.
Module: 4 > New service development > Components of service
design > Page: 236-238
Question 6 Marks: 0
A company is looking to release a new feminine hygiene product. Unlike competitors, the
product range will be small, and they won’t spend on advertising. They will make the
products from recycled materials, and invest a percentage of profits in community
programs that help women escape domestic violence.
Which of the following theories are they applying to their strategy?
Answer Options
You answered C. The correct answer is D
USER SELECTION CORRECT ANSWER
A Value innovation.
B The strategy canvas.
C Human centred design.
D Four actions framework.
Answer Explanation
D is correct because they are using this framework as part of applying blue ocean
strategy. The company wants to eliminate advertising from the product attributes. They
want to reduce the range (choice) for consumers to make it simpler. They want to create a
focus on sustainability and social causes. This last point could be either create or raise
depending on what competitors currently do.
A is incorrect because the question information is pointing to more than just cost reduction
and increasing buyer value.
B is incorrect because the strategy canvas is valuable but the question is pointing directly
to the four actions framework.
C is incorrect because this is a little different from the focus on understanding the needs
and motivations of people. That plays a role but again, the question is specifically talking
about eliminating, reducing, and creating product attributes.
Module: 4 > Approaches to developing new products and services >
Page: 241-248
Question 7 Marks: 1
It has been argued that services are just a different type of “product”sold by a business
and they have the same characteristics as products overall.
Which is the following statements best describes why services are not the same as
products?
Answer Options
You answered C. The correct answer is C
USER SELECTION CORRECT ANSWER
A Services will always be used more than once.
B Products generate working capital but services don't.
C Services are more intangible and variable than products.
Products don't require as high a level of skill and expertise to deliver as
D
services.
Answer Explanation
C is correct because services can be purchased similarly to products, but they are often
characterised by a high degree of intangibility and variability.
A is incorrect because services might sometimes be only used once, just as we cannot
infer that products are only used once. A cancer patient definitely hopes to only use
cancer treatment services once (although we know it often requires many treatments).
B is incorrect because the definition of working capital doesn't preclude services. If you
are not sure, refer to your SMA study guide!
D is incorrect because there is no evidence that services require a hire level of skill to
deliver. Here we refer to deliver as the whole process, not deliver by transport. To "deliver"
a pharmaceutical drug product requires very high skill levels. Without wishing to cause
offence, a gym instructor probably requires less skill to deliver their personal training
service.
Module: 4 > 4.2 New product, service and market development > Is it a
new or existing product? > Page: 219
Question 8 Marks: 1
Which of the following is a characteristic of a franchising business model?
Answer Options
You answered C. The correct answer is C
USER SELECTION CORRECT ANSWER
A Distributing profits and sharing costs and resources.
B Providing your branding and intellectual property to others.
C Using a standardised operating model across the business.
D Moving part of your operations offshore to deliver lower costs to the business.
Answer Explanation
C is correct because using a standardised business model allows you sell the business
model as a franchise operation.
A is incorrect because this is a characteristic of a joint venture model.
B is incorrect because this is a characteristic of a licensing model.
D is incorrect because this is about offshoring and not a market entry model.
Module: 4 > 4.6 New market development > Common modes of entry
into new geographic markets > Page: 266-267
Question 9 Marks: 1
Bluebean coffee wishes to expand into other geographical markets. It has limited cash
available and so can only afford a low upfront investment. Bluebean know that this is likely
to mean they cannot enter the market as fast as they would like and that they will have to
settle for a medium speed entry into the market. However, they have a management team
that is experienced in the complexity of market expansion and want to involve them
directly in the proposed expansion.
Which of the following modes of entry is best suited to Bluebean’s constraints and
requirements?
Answer Options
You answered D. The correct answer is D
USER SELECTION CORRECT ANSWER
A Licensing
B Acquisition
C Joint venture
D Strategic alliance
Answer Explanation
D is correct because a strategic alliance allows a medium speed of entry to the market,
involves high levels of managerial complexity but has the advantage of a low up front
investment.
A is incorrect because licensing requires low managerial complexity and will not provide
the opportunity to leverage the skills of their experienced management team.
B is incorrect because acquiring a company has a faster speed of entry than forming an
alliance.
C is incorrect because a joint venture requires a medium up-front investment which
Bluebean do not have.
Module: 4 > 4.6 New market development > Common modes of entry
into new geographic markets > Page: 267
Question 10 Marks: 1
Besop cosmetics (Besop) wishes to expand into the Asian region in 20X5. It has a strong
managerial team in place who have experience with operating in the Asian region’s
complex political environments. Besop wants to establish a strong presence and grow in a
manageable way, hoping to gain a medium level of market share over the next two years.
Which of the following modes of entry is best suited to Besop’s requirements and
constraints?
Answer Options
You answered D. The correct answer is D
USER SELECTION CORRECT ANSWER
A Acquisition
B Franchising
C Joint venture
D Wholly owned
Answer Explanation
D is correct because converting Besop into a wholly owned enterprise would involve high
political risks and managerial complexity and additionally Besop’s aim is for a medium level
of market share.
A is incorrect because acquiring a company is a more aggressive strategy that should
achieve a high level of market penetration with a fast speed of entry to the market, rather
than the medium speed approach that Besop want to take.
B is incorrect because this option does not let Besop take full advantage of the experience
of their management team. This is as franchising only requires a medium level of
managerial complexity as the franchisees take on that risk (on the basis that they have the
experience to do so).
C is incorrect because a joint venture should lower the political risk and will be a quicker
speed of entry to the market (likely to be under 2 years) and this does not meet Besop’s
requirements.
Module: 4 > 4.6 New market development > Common modes of entry
into new geographic markets > Page: 269
