Which of the Following Is a Risk a Company Takes

question 101

Multiple Choice

Which of the following is a risk a company takes when building a strategy around the experience curve?

• A) Competitors will likely not be able to meet the company's price cuts.
• B) Existing technologies are likely to become more expensive as the company expands.
• C) The method does not take competitors' prices into account.
• D) The method may cause consumers to become frustrated with changing prices.
• E) Aggressive pricing may give the product a cheap image, causing customers to lose interest.

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Definitions:

Compa-Ratio

An index that indicates how an individual’s or a group’s salary relates to the midpoint of their relevant pay grades.

Piecework

A type of incentive system that compensates workers for each unit of output.

Individual Incentive Plans

Compensation strategies designed to reward employees based on their individual performance and achievements.

Commissions

Earnings based on a percentage of the sales made by an employee or agent, as a form of incentive pay.