Hueblue Software, an Application Provider to the Gaming Industry, Decided

question 7

Multiple Choice

Hueblue Software, an application provider to the gaming industry, decided to enhance its portfolio by developing motion-control-enabled games for the mobile gaming industry. In this scenario, which competitive strategy is Hueblue Software implementing?

• A)establishment of alliances
• B)product differentiation
• C)raising barriers to market entry
• D)locking in buyers

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Definitions:

Leverage

Use of borrowed capital for investment with the aim to multiply the potential returns, while also increasing the risk of loss.

Independence Hypothesis

In capital structure theory, the original restrictive model by Modigliani and Miller that shows stock price to be independent of capital structure.

Modigliani

Refers to Franco Modigliani, an economist known for his work on the Modigliani-Miller theorem, which addresses the valuation of stocks and corporate taxes.

Miller

Miller refers to the Miller Modigliani theorem or Miller's theory, which deals with the capital structure of a company and the relationship between the return required by investors and the company's equity and debt.