There Are Several Basic Approaches to Competing Successfully and Gaining

question 63

Multiple Choice

There are several basic approaches to competing successfully and gaining a competitive advantage over rivals,such as:

• A) finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities.
• B) delivering more value to its customers than rivals or delivering value more efficiently than rivals (or both).
• C) getting in the best strategic group and establishing a dominating role.
• D) entering into strategic alliances,utilizing mergers or acquisitions to strengthen its market position,outsourcing some in-house activities to outside specialists,and integrating forward or backward.
• E) All of these.

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Definitions:

Equity Risk

The risk of loss associated with fluctuations in the price of equities or stocks.

M&M Proposition I

A principle in corporate finance that asserts the market value of a firm is unaffected by the capital structure, assuming no taxes and perfect markets.

M&M Proposition II

A theory proposing that the cost of equity increases with the level of debt in a company, making the firm's weighted average cost of capital remain unchanged.

Cost of Equity

The return rate that shareholders require to invest in a company's equity, taking into account the risk associated with the investment.