A Strategic Position Is Important to the Success and Growth

question 64

Multiple Choice

A strategic position is important to the success and growth of any organization.Harvard professor Michael Porter has identified three basic strategic positions.Which statement below is false regarding these basic strategic positions?

• A)The three basic strategic positions are mutually exclusive of each other.
• B)Part of a needs-based strategic position is to identify a target market.
• C)An access-based strategic position involves serving a subset of customers who differ from other customers in terms of geographic location or size.
• D)A variety-based strategic position involves producing or providing a subset of the industry's products or services.

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Definitions:

Cash Flows

The sum of money flowing in and out of a company, particularly influencing its ability to cover short-term obligations.

Cost of Capital

The yield a business needs to generate from its project ventures to preserve its market valuation and draw in capital.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows.

IRR

Internal Rate of Return, a metric used in capital budgeting to estimate the profitability of potential investments.