An Investor Is Considering in Which of Two Start-Up Companies

question 105

Multiple Choice

An investor is considering in which of two start-up companies she should invest. The investor has faith in the industrial organizational model of above-average returns, and she is using its concepts to make her decision. Both start-up companies propose to manufacture health-focused foods with such characteristics as low salt, low sugar, high fiber, and no artificial additives. RexRich Foods has a business strategy of producing a differentiated product for which consumers will pay more. Green Pastures Foods is in the health-foods industry because of its internal culture and commitment to healthful lifestyles. Which firm will the investor feel is most consistent with the model of industrial organization?

• A) Green Pastures Foods
• B) RexRich Foods
• C) Both firms are consistent with the I/O approach.
• D) At the entrepreneurial stage, the model which companies follow is not important.

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Definitions:

Gross Negligence

A severe lack of care or the deliberate disregard of one's responsibilities, often resulting in harm or damage.

Libel

Defamation in writing or in some other form (such as a digital recording) having the quality of permanence.

Good Name

The reputation, credibility, or respect that an individual or organization has earned over time.

Reputation Orally

The perception of an individual's or entity's character and standing communicated through spoken word.