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Application of Porter's Competitive Strategy

question 65

Multiple Choice

Application of Porter's Competitive Strategy
Stacie sighed. Her general manager had just left after giving her the latest assignment- readdress the competitive advantage of their company. By Friday's meeting, Stacie was to have developed three differing strategies the business could use in order to maintain its competitive advantage. Its computer business was slowly losing market share to its competitors, and everyone realized something needed to be done. Stacie glanced through the article by Michael Porter that her manager had left with her. According to Porter, there were three differing types of strategies they could choose from. Stacie began wondering if there was a way they could make their computers cheaper, which would allow them to then sell at a lower price. If they could reduce price by $100 a machine, they would be the industry leaders in price. Stacie wondered if they could find any lower- priced suppliers for the more expensive parts of their computers. She knew that their computers appealed particularly to small business owners due in part to price. They were able to offer the lower price because their computers were not as powerful or fast as some machines, but did contain the necessary word processing, database, and spreadsheet capabilities necessary for a typical small business owner. The lack of frills with the solid three program capabilities, plus their known reputation for quality had worked for them in the past. Stacie wondered if perhaps they needed to look at a smaller segment of the market, maybe small businesses with large accounts receivables that would fully utilize their specific database. She knew that would cut their market by 1/8 but maybe achieving a definite market niche would help. Stacie began compiling her report for Friday's meeting.
-Stacie knew that in order to keep its competitive advantage, her company would have to do which of the following?

Definitions:

Perceived O/I Ratio

The perceived ratio of outputs (rewards) to inputs (efforts), often used in organizational psychology to explain motivation and job satisfaction.

Sales Commissions

A part of compensation given to sales employees based on the volume or value of sales they have generated.

Self-evaluation

The process of reflecting on one's own performance, behaviors, skills, or qualities, often for self-improvement or personal development purposes.

Generosity

The quality of being kind and generous.