A company that increases capacity before demand increases, to gain market share and prepare for growth, is following which strategy?

Question

BlackTom AI · Accepted Answer

We start by restating the scenario to anchor our analysis: a company increases capacity before demand rises in order to gain market share and prepare for growth. Now let's evaluate each answer option in turn.

Option 1: Wait-and-see strategy. This approach typically involves delaying investments until demand or market conditions become clearer or more favorable. It would mean not expanding capacity proactively, which contradicts the premise of increasing capacity ahead of demand. Therefore, this option does not fit the described behavior.

Option 2: Constraint management strategy. Constraint management focuses on identifying and alleviating bottlenecks or limits in a system to improve throughput, often within existing capacity. While related to operational efficiency, it does not inherently imply expanding capacity before demand or pursuing market share via pre-emptive scale. Thus, this choice misaligns with the given scenario.

Option 3: Expansionist strategy. This label directly captures the idea of growing proactively—adding capacity in anticipation of demand to secure a larger market position and support future growth. It aligns with the description of preemptive capacity expansion aimed at market share and growth readiness, making this the correct interpretation.

Option 4: Economies of scale strategy. Economies of scale refer to cost advantages gained when production increases, often through larger volumes lowering per-unit costs. While expanding capacity could enable economies of scale, the core intent in the question emphasizes gaining market share and preparatory growth rather than merely reducing unit costs. Therefore, this option is related but not the best match to the stated objective.

In summary, the scenario centers on proactive capacity expansion to capture market share and prepare for growth, which is most accurately described by the expansionist strategy. The other options describe different focuses (delay, bottleneck management, or cost-focused scale) that do not fully fit the described approach.

MGS3100W10 Assignment 2

A company that increases capacity before demand increases, to gain market share and prepare for growth, is following which strategy?

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MGS*3100*W10 Assignment 2

A company that increases capacity before demand increases, to gain market share and prepare for growth, is following which strategy?

View Explanation

Log in for full answers

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MGS3100W10 Assignment 2