Which of the Following Statements Is Incorrect About Fundamental Business

question 47

Multiple Choice

Which of the following statements is incorrect about fundamental business strategies?

• A)A company implementing a cost differentiation strategy is attempting to increase operating efficiency of assets and improve the inventory turnover ratio.
• B)A company implementing a product differentiation strategy is attempting to improve its net profit margin through charging higher prices.
• C)A company will be more profitable because it will attract a higher volume of customers and sales revenue when it follows a product differentiation strategy versus a cost differentiation strategy.
• D)In general,a cost differentiation strategy results in lower profit margins whereas a product differentiation strategy results in higher profit margins.

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Definitions:

General Plan

An overarching strategy or outline intended to achieve long-term goals.

Buffer

A temporary storage area, typically in memory, used to hold data while it is being transferred from one place to another.

Justification Material

Evidence or reasoning presented to support an argument or decision.

Strategic Buffer

A tactic or method used in communication to mitigate potential negativity or soften the delivery of a message.