Scenario - SS.com Faced with Rapidly Growing Business, Swift Stocks, Inc., a Stocks

question 10

Multiple Choice

Scenario - SS.com
Faced with rapidly growing business, Swift Stocks, Inc., a global brokerage company with the largest market share, recently announced that it has established an on-line stock investment and trading subsidiary, SS.com, where investors can trade stocks at the lowest rates in the industry. The .com subsidiary has less than one percent market share but it faces a very high business growth rate. In the brokerage industry the competition is fierce and all players are cutting their on-line commission rates.
-Swift Stock is following which strategy, according to Porter, through the .com subsidiary?

• A) Stability
• B) Cost leadership
• C) Focus
• D) Differentiation
• E) Retrenchment

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Definitions:

Incremental Analysis

The examination of the additional costs and benefits of certain decisions, focusing on the changes that would occur from choosing one alternative over another.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment.

Accounting Rate of Return

The rate of return anticipated on an investment in terms of accounting income, typically used to evaluate the profitability of a project or investment.

Financial Accounting Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and statement of cash flows.