Sematech Is a Producer of Computer Chips

question 26

Multiple Choice

Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs.
-By employing a low-cost competitive strategy, Sematech has made itself

• A) less able to withstand industry price wars.
• B) more vulnerable to rivals.
• C) less vulnerable to the power of suppliers.
• D) more vulnerable to the power of buyers.

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Definitions:

Accounts

Financial records of transactions that track the income, expenses, assets, liabilities, and equity of an entity.

Double-Entry System

An accounting method that records each transaction in at least two accounts, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced.

Debit Accounts

Accounts that are increased by debits and decreased by credits, commonly including assets and expenses.

Credit Accounts

Financial accounts that track money owed to creditors; they increase with credit entries and decrease with debit entries, reflecting the entity's borrowing of funds.