Mergers and Acquisitions Are Often Driven by Such Strategic Objectives

question 59

Multiple Choice

Mergers and acquisitions are often driven by such strategic objectives as

• A) expanding a company's geographic coverage or extending its business into new product categories.
• B) reducing the number of industry key success factors.
• C) reducing the number of strategic groups in the industry.
• D) facilitating a company's shift from a low-cost leadership strategy to a focused low-cost strategy.
• E) lengthening a company's value chain and thereby putting it in a better position to deliver superior value to buyers.

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Definitions:

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent and salaries.

Sales Mix

The proportion of different products or services that a company sells, influencing overall sales and profitability.

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) when calculating the cost of goods sold and in the determination of profitability.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.