The Owner of a Store Retailing Fine Quality Fabrics for Home-Sewers

question 111

Multiple Choice

The owner of a store retailing fine quality fabrics for home-sewers bewails the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics available and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of

• A) the hazard of competitors being able to imitate a firm's core competency.
• B) the need for firms to stick to their core competencies through temporary downturns in market demand.
• C) the lack of intangible resources undermining the core competencies of the firm.
• D) core competencies that have become core rigidities.

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Definitions:

Grow the Dividend

A strategy aimed at gradually increasing the dividend payout to shareholders over time, demonstrating financial health and confidence in future earnings.

Current Price

The current trading price of a security, commodity, or index in the market.

Constant Rate

A fixed percentage rate applied consistently over a period of time, often used in the context of growth rates, discount rates, or interest rates.

Dividend Per Share

The amount of dividend that a company pays out to its shareholders for each share owned.