One Risk of the Differentiation Strategy Is That

question 29

Multiple Choice

One risk of the differentiation strategy is that:

• A)a competitor may focus on the same market segment
• B)equipment may quickly become obsolete
• C)a firm's means of differentiation may no longer provide value to the customer
• D)a firm may fail to detect competitors' efforts to differentiate the commodity product

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Definitions:

Indirect Method

A cash flow statement technique that starts with net income and adjusts for changes in balance sheet accounts to arrive at operating cash flow.

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Operating Expenses

The ongoing costs for running a business that are not directly tied to the production of goods or services, such as rent, utilities, and salaries.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions, deferrals, and accruals to calculate cash flow from operating activities.