Using General Electric's "Strategic Planning Grid," an Opportunity Rated "Medium

question 268

Multiple Choice

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as:

• A) yellow-borderline.
• B) red-for no growth.
• C) green-for growth.
• D) could be yellow, red, or green-because the grid really doesn't deal with "medium" ratings.

Analyze the impact of discontinuing product lines on overall profitability.

Calculate net operating income incorporating common fixed expenses.

Distinguish between variable costing and absorption costing net operating incomes.

Identify the contribution margin and its significance in profit planning.

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Definitions:

Profit Area

A segment of a business or a market where the income earned is more than the expenses incurred, resulting in a financial gain.

Price Per Unit

The cost of a single unit of a product or service.

Government-Granted Exclusive Right

A privilege or authority granted by the government to an individual or organization, typically giving them the sole right to produce, use, or sell a particular good or service.

Willingness to Pay

The maximum amount that a consumer is prepared to spend on a good or service.