A Firm Using A(n) __________ Strategy Generally Needs to Operate

question 18

Multiple Choice

A firm using a(n) __________ strategy generally needs to operate "below the radar" of larger and more resource rich firms that serve the broader market.

• A) cost leadership
• B) differentiation
• C) focused
• D) integrated cost leadership/differentiation

---

Definitions:

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profitability that includes all expenses except interest and income tax expenses.

Unlevered Firm

A company that operates without any debt financing, relying solely on equity for its financing needs.

Levered

Pertaining to the use of borrowed capital or debt to increase the potential return of an investment.

Break-Even EBIT

The level of Earnings Before Interest and Taxes that a company needs to achieve in order to cover all of its operating expenses without making a profit or loss.