Company CCC is an automotive component manufacturer.

CIMA E3 Question Answer

Company CCC is an automotive component manufacturer. It manufactures three main products within its portfolio:

Product 1: Relative market share of 0.1; Market growth rate of -2%

Product 2: Relative market share of 4.0; Market growth rate of +3%

Product 3: Relative market share of 0.3; Market growth rate of +15%

Which TWO of the following statements are CORRECT? (Choose two.)

Product 2 is likely to be at the mature stage of its life cycle, is likely to benefit from significant economies of scale.

Product 3 is likely to be at the growth stage of its life cycle, at high risk of failure and further investment should be considered.

Product 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.

Product 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.

Product 1 islikely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.

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