Ali Is a Business Unit Head of a Soap Manufacturing

question 55

Essay

Ali is a business unit head of a soap manufacturing company. Explain the strategy he could use to strengthen his market position and build a competitive advantage over his rivals. Differentiate between his strategy and a corporate strategy.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, used to cover fixed costs and generate profit.

Differential Revenue

Differential revenue is the difference in revenue between two alternative decisions or periods, highlighting the potential increase or decrease in income resulting from a chosen action.

Condensed Income Statement

A simplified income statement that presents only key revenue and expense items, ignoring detailed breakdowns.

Discontinuance

The act of ending or terminating a business operation or the production of a product line.