When Developing and Assessing Strategic Alternatives, It Is Important to Remember

question 89

True/False

When developing and assessing strategic alternatives, it is important to remember that companies competing in international markets confront two opposing forces: reduction of costs and adaptation to local markets.

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Definitions:

Contribution Margin Ratio

A financial metric that measures the proportion of revenue that exceeds variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Variable Expenses

Costs that change in proportion to the level of activity or volume of output in a business.

Fixed Expenses

Costs that do not change in total regardless of the level of production or sales activity, such as rent and salaries.

Net Income

The total profit or loss of a company after all expenses, including taxes and operating costs, have been subtracted from revenues.