Which of the Following Is Not an Appropriate Guideline for Developing

question 119

Multiple Choice

Which of the following is not an appropriate guideline for developing a strategic group map for a given industry?

• A) The variables chosen as axes for the map should indicate big differences in how rivals have positioned themselves to compete in the marketplace.
• B) The variables chosen as axes for the map can be either quantitative or qualitative.
• C) The variables chosen as axes for the map should be highly correlated.
• D) Several maps should be drawn if more than one pair of variables help illuminate differences in the competitive positioning of industry members.
• E) The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

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Definitions:

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories (assets, liabilities, and equity) is represented as a proportion of the total.

Common Size Analysis

A financial analysis technique that converts each line of financial statement data to a percentage of a base amount.

Statement Of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specified period.

Dividends Paid

The total cash distributed by a company to its shareholders as a share of the profits.