To Build a Competitive Advantage by Out-Managing Rivals in Performing

question 4

Multiple Choice

To build a competitive advantage by out-managing rivals in performing value chain activities,a company must

• A) position itself in the industry's more favorably situated strategic group.
• B) develop resources strengths that will enable it to pursue the industry's most attractive opportunities.
• C) develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities such that it has a low-cost advantage.
• D) outsource all of its value chain activities to world-class vendors and suppliers.
• E) eliminate its resource weaknesses.

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Definitions:

M&M Proposition I

A theory in corporate finance stating that in a perfect market, the value of a firm is unaffected by how it is financed, whether through debt or equity.

Equity Risk

The risk of loss associated with fluctuations in the equity market.

Capital Structure Policy

Refers to the decisions a company makes regarding the mix of long-term debt and equity financing in its capital structure.

Financial Risk

The potential for monetary loss in investing or engaging in a business enterprise.