A Differentiation-Based Competitive Advantage

question 60

Multiple Choice

A differentiation-based competitive advantage

• A)nearly always is attached to the quality and service aspects of a company's product offering.
• B)usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience.
• C)requires developing at least one distinctive competence that buyers consider valuable.
• D)hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry.
• E)often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

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Definitions:

Stock's Expected Price

An estimate of the future price of a stock based on earnings forecasts, market trends, and other factors.

Target Capital Structure

The optimal mix of debt, equity, and other sources of financing that a company aims to achieve for minimizing cost of capital and maximizing value.

Residual Dividend Policy

A strategy where dividends are paid to shareholders after all project and operational expenses, and planned investments are covered.

Forecasted Net Income

An estimate of a company's future net earnings over a specific period, considering expected income and expenses.