For a Hotel Company Whose Competitive Advantage Is Based on High

question 63

Multiple Choice

For a hotel company whose competitive advantage is based on high brand name recognition, which of the following ways of serving an overseas market makes the most sense?

• A) Exporting
• B) Licensing
• C) Franchising
• D) Entering into a joint venture with a foreign company
• E) Setting up a wholly owned subsidiary

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Definitions:

Service Department Expenses

Costs incurred by the service departments within a company, which support the production or operations but do not directly produce goods.

Income from Operations

The profit generated from a company's core business operations, excluding income from other sources and expenses unrelated to operations.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs associated with making or selling goods and services, showing profitability.

Activity Base

This term is associated with cost accounting and refers to a measure of activity that is used as a basis for allocating costs to cost objects.