Intrigued by the Fast-Paced Technology Industry, Samantha Decided to Open

question 30

Multiple Choice

Intrigued by the fast-paced technology industry, Samantha decided to open a technology start-up. She soon realized that the competition in this industry is fierce and a high level of capital is needed to stay on top. After a few years, she sold her company and went on to pursue different interests. This is an example of which fatal flaw in strategic thinking?

• A) failure to identify a true competitive advantage
• B) misreading industry attractiveness
• C) pursuing a competitive advantage that is not sustainable
• D) compromising a strategy in an attempt to grow faster

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Definitions:

Predatory Pricing

A competitive strategy where a company sets very low prices for its products or services with the intent to drive competitors out of the market.

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.