Harold Is the Owner of a Beer Cafe in His

question 18

Multiple Choice

Harold is the owner of a beer cafe in his locality.His beer cafe is not the only one in the area.In order to improve business, Harold decides to make a few changes to his cafe.He installs state-of-the-art music system, a karaoke machine, and a snooker table in his cafe.Customers flock to his cafe every evening because it is the only cafe in the locality with these facilities.Which of the critical steps involved in conducting an external analysis has helped Harold improve his business?

• A)Defining the customers
• B)Examining and developing insights about elasticity of demand
• C)Developing an understanding of the competitive advantage
• D)Drawing a set of competitive maps

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Definitions:

Proportion

A part, share, or number considered in comparative relation to a whole.

Vertical Analysis

A financial analysis method that expresses each item in a financial statement as a percentage of a base figure, facilitating comparison across companies or periods.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been subtracted from total revenue, indicating the company's profitability.

Common Size Analysis

A financial analysis technique that expresses each line item on a financial statement as a percentage of a base figure to allow for comparison.