Identify a True Statement About the Innovative Strategy of Disintermediation

question 25

Multiple Choice

Identify a true statement about the innovative strategy of disintermediation.

• A)It uses the price skimming strategy to gain a foothold in the market.
• B)It involves reconfiguring the value chain to eliminate activities or steps.
• C)It creates products that outperform existing products in the market.
• D)It involves producing a low-cost product or service at the low-end or most price-sensitive segment of the market.

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Definitions:

Return on Equity

A financial ratio indicating the profitability of a company relative to shareholders' equity, showing how much profit is generated with the money shareholders have invested.

Du Pont Identity

This financial analysis formula breaks down the return on equity into three parts: operating efficiency, asset use efficiency, and financial leverage.

Total Equity

The value of the owners' interest in a company, calculated as the company's total assets minus its total liabilities.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, often referred to as the bottom line.