Many Companies Start as Niche Operations in Order to Get

question 74

Multiple Choice

Many companies start as niche operations in order to get a foothold against larger competitors and then grow into broader competitors. Enterprise Rent-A-Car began by building a network of neighborhood offices rather than competing with Hertz and Avis in airport locations. Enterprise is now a large car rental company. Which of the following is best supported by the statements above?

• A) The best path to long-term growth is to avoid confrontation with larger competitors for as long as possible.
• B) It is generally better to confront one established competitor at a time rather than many at once.
• C) Even when competing in a niche, a company should act in every respect as if it is targeting every market segment.
• D) The car rental industry is the best example for niche companies to consider when evaluating how to grow into prominence.
• E) A company's initial goals do not place limits on its long-term success.

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Definitions:

Total Expenditures

The sum of all expenses and spending by an individual, organization, or government within a specified period.

Isocost Line

A graph line that shows all combinations of inputs which cost the same total amount.

Capital

Financial assets or the financial value of assets, such as cash and goods, used to generate income or wealth.

Labor

The utilization of human physical and mental capabilities in the crafting of goods and delivery of services.