In Order to Defend Itself Against Attacks from Challenger Firms

question 37

Multiple Choice

In order to defend itself against attacks from challenger firms, a follower firm must:

• A) keep its manufacturing costs low and its product and services quality high.
• B) closely watch its weaker flanks.
• C) attack other firms its own size or smaller local firms.
• D) be bold in everything it does.
• E) undertake a strategic withdrawal.

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Definitions:

Sales Volume

The total number of units of product sold in a particular period.

Contribution Format

An income statement layout that segregates fixed costs from variable costs, thus highlighting the contribution margin.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross profit but before taxes and interest costs are deducted.

Sold Units

The total number of units of a product that have been sold within a specific time period.