What Are the Drivers of an Effective Differentiation Strategy

question 26

Essay

What are the drivers of an effective differentiation strategy?

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Definitions:

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses but before deducting taxes and interest.

Variable Costing

A cost accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Net Operating Income

The profit a company makes after deducting operating expenses but before interest and taxes from its total revenue.

Direct Labor Cost

The expense associated with employees who physically convert raw materials into the company's products; considered a variable cost.