CBS Business Growth & Development 3 — Questions and Answers
Question 1: When a company enters a foreign market by selling products through a local distributor without establishing a local presence, this is known as:
- Greenfield investment
- Direct exporting
- Indirect exporting (Correct answer)
- Turnkey project
Correct answer: Indirect exporting
Indirect exporting uses intermediaries such as local distributors or agents, requiring minimal investment and local knowledge from the exporting company.
Question 2: The primary purpose of a go-to-market (GTM) strategy during a product launch is to:
- Define the internal R&D budget for the product
- Outline how the company will deliver its value proposition to target customers and achieve competitive advantage (Correct answer)
- Set the long-term capital expenditure plan for manufacturing
- Establish employee compensation structures for the product team
Correct answer: Outline how the company will deliver its value proposition to target customers and achieve competitive advantage
A GTM strategy specifies the target market, value proposition, pricing, channels, and messaging needed to successfully introduce a product and win customers.
Question 3: A company experiencing 'churn' is dealing with:
- Rapid employee hiring due to business expansion
- Customers canceling subscriptions or stopping purchases over a period (Correct answer)
- High variability in quarterly revenue projections
- Supply chain disruptions causing production slowdowns
Correct answer: Customers canceling subscriptions or stopping purchases over a period
Churn rate measures the percentage of customers who stop doing business with a company in a given period, and high churn is a critical impediment to sustainable growth.
Question 4: Which growth hacking technique involves allowing users to access a product for free while charging for premium features?
- Viral loop
- Freemium model (Correct answer)
- Affiliate marketing
- Penetration pricing
Correct answer: Freemium model
The freemium model offers a basic version at no cost to drive user acquisition, then monetizes through upgrades to premium tiers with additional features or capacity.
Question 5: A company's 'burn rate' is most directly relevant to which aspect of growth planning?
- Determining optimal marketing spend allocation
- Understanding how long current cash reserves will sustain operations (Correct answer)
- Calculating the return on investment for a new product line
- Measuring employee productivity across departments
Correct answer: Understanding how long current cash reserves will sustain operations
Burn rate tracks how quickly a company spends its cash reserves, which directly determines its runway—how many months it can operate before needing additional funding.
Question 6: Porter's Five Forces framework is most useful for a strategist assessing:
- A company's internal resource capabilities and competencies
- The competitive intensity and attractiveness of an industry (Correct answer)
- The cultural fit between two merging organizations
- Employee motivation and engagement levels
Correct answer: The competitive intensity and attractiveness of an industry
Porter's Five Forces analyzes industry-level competitive dynamics—rivalry, new entrants, substitutes, buyer power, and supplier power—to assess how attractive an industry is for profitable participation.
Question 7: In the context of business development, a 'strategic account' typically refers to:
- A company bank account designated for strategic investments
- A high-value customer relationship that requires dedicated management and customized service (Correct answer)
- An internal budget allocation for new market entry
- A government-regulated account for compliance reporting
Correct answer: A high-value customer relationship that requires dedicated management and customized service
Strategic accounts are key customers whose revenue, growth potential, or strategic value justify dedicated account management resources and tailored solutions.
CBS Business Growth & Development 3
When a company enters a foreign market by selling products through a local distributor without establishing a local presence, this is known as: