In Which of the Following Circumstances Is a Strategy to Be

question 84

Multiple Choice

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

• A) when the offerings of rival firms are essentially identical and readily available from many eager sellers
• B) when there are few ways to achieve differentiation that have value to buyers
• C) when price competition among rival sellers is especially vigorous
• D) when buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high
• E) when the majority of industry sales are made to a few, large-volume buyers

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Definitions:

Seasoned Issue

A new offering of stock to the public from a company that has previously issued securities to the public.

Indirect Costs

Costs that are not directly tied to a specific project or product, such as administration, personnel and security costs.

Direct Costs

Expenses that can be directly linked to the production of a specific good or service, such as raw materials and labor.

Underwriting Spread

The difference between the price at which underwriters purchase securities from the issuer and the public offering price set for the securities.