Porter's Competitive Strategies Framework Outlines How Management Can Create and Sustain

question 1

True/False

Porter's competitive strategies framework outlines how management can create and sustain a competitive advantage that will give a company above-average profitability.

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Definitions:

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, equating to the opportunity cost of capital and resources.

Implicit Costs

Indirect expenses that do not involve a direct cash outlay but represent an opportunity cost, such as using resources for one purpose over another.

Average Product

The output per unit of input, such as the number of goods produced per worker, used to measure productivity efficiency.

Marginal Product

The additional output that is produced by employing one more unit of a factor of production, holding other factors constant.