According to Porter, the Processes and Systems in an Organization

question 5

Multiple Choice

According to Porter, the processes and systems in an organization pursuing differentiation strategy must ________ to avoid negative margins.

• A) create sufficient value to cover their costs
• B) provide products at lowest costs to customers
• C) develop and adopt new technologies
• D) increase procurement

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Definitions:

Cost Of Merchandise Sold

The cost that is reported as an expense when merchandise is sold.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the basic profitability of a company's core business activities.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management.

LIFO

"Last In, First Out," an inventory valuation method where the latest goods purchased are the first to be sold.