The Integration of a Cost Leadership and a Differentiation Strategy

question 97

Multiple Choice

The integration of a cost leadership and a differentiation strategy

• A) is challenging because of the inherent difficulties in balancing primary and support activities.
• B) forces a firm to adapt more slowly to changes in its environment.
• C) allows the firm to avoid being "stuck in the middle."
• D) requires such a large customer base that it is most practical for firms in the global marketplace.

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Definitions:

Margin of Safety

The difference between actual or expected sales and the sales level at which a company breaks even, providing a buffer against losses.

Unit Selling Price

The amount of money charged for one unit of a product or service.

Break-even Point

The point at which total costs equal total revenue, meaning no profit or loss is generated.

Manufacturing Margin

The difference between the cost of manufacturing the product and the price it is sold for, indicating the profitability of production.