Michael Porter's Generic Strategies Model Identifies Four Fundamental Strategies

question 66

Multiple Choice

Michael Porter's generic strategies model identifies four fundamental strategies. Which of the following correctly describes these strategies?

• A) Introduction, growth, maturity and decline.
• B) Growth, retrenchment, vertical integration and stability.
• C) Differentiation, cost leadership, focused differentiation and focused cost leadership.
• D) Stars, cash cows, dogs and question marks.
• E) Growth, differentiation, incremental and emergent.

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Definitions:

Contribution Format

A type of income statement format that separates variable costs from fixed costs to highlight the contribution margin.

Break-even Point

The financial point at which total revenue exactly matches total costs; neither profit nor loss is realized.

Dollar Sales

The total revenue generated from the sale of goods or services, expressed in monetary units.

Contribution Margin Ratio

A financial indicator demonstrating the proportion of sales income that is not absorbed by variable expenses, hence aiding in the coverage of fixed costs.