Firms That Occupy Second, Third, and Lower Ranks in an Industry

question 23

Multiple Choice

Firms that occupy second, third, and lower ranks in an industry can adopt two postures in responding to competition. First, they can attack the leader and other competitors in an aggressive bid for further market share. Second, they can

• A) not worry about the immediate future and focus on long-term results (market maturation).
• B) play ball and not "rock the boat" (market followers).
• C) give up and quit (market abandonment).
• D) relinquish their own share to industry leaders (market capitulators).
• E) form alliances with enemies (market organizational constriction).

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Definitions:

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share of the company’s profits through dividends.

Goodwill

An intangible asset representing the value of a company's brand, customer relationships, and other non-physical assets that contribute to earnings.

Equity Method

An accounting technique used to assess the profits earned through a company's investment in other firms, where the investment is recorded at original cost and adjusted according to the investor's share of the investee's profit or loss.

Common Stock

A form of investment that signifies a stake in a corporation, granting its owners the right to vote and participate in the profits of the company through dividends.