How Can a Company Reduce the Threat of Substitute Products

question 157

Multiple Choice

How can a company reduce the threat of substitute products or services?

• A) Market the product to less than 10 customers
• B) Ignore competitive forces
• C) Offer additional value through wider product distribution
• D) Offer less value making the product far more generic and similar to the competition

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with dividends that are paid out before those to shareholders of common stock.

Common Stock

Common stock is a type of equity ownership in a corporation, representing a claim on part of the company's profits and conferring voting rights.

No Par Common Stock

is common stock that has been issued without a par value, meaning its value is not fixed in the company’s charter but is determined by the market.

Cash Price

The amount of money that a buyer must pay to purchase a good or service immediately without financing.