​You Asked Your Stockbroker to Consider Buying Some Shares of Facebook

question 15

Multiple Choice

​You asked your stockbroker to consider buying some shares of Facebook, Inc. for your investment account. But, first you want to review the summary points in the SWOT analysis the stockbroker's firm did on the company. The following summary points were listed in the SWOT analysis: 1. Facebook has a reputation as a market leader and it is quickly establishing a formidable brand loyalty amongst its users."2. Because of its position in the industry, it risks incurring high costs associated with creating and marketing new products that are designed to perpetuate its industry leadership.These summary points suggest"

• A)that Facebook's products are Cash Cows.
• B)that Facebook has a first-mover advantage.
• C)that Facebook's products are Question Marks.
• D)that Facebook has a superior marketing strategy versus its peers.
• E)that Facebook has a late-mover advantage.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Positive Profits

The financial gain that occurs when total revenue exceeds total costs.

Long Run

A period in which all factors of production and costs are variable, allowing full adjustment to any change in market conditions.