According to Michael Porter, Which of the Following Is True

question 46

Multiple Choice

According to Michael Porter, which of the following is true of differentiation as a generic strategy?

• A) It is an effective strategy for obtaining above-average financial returns because unique products often command premium price.
• B) It offers an opportunity for small, specialized companies to grow while retaining their narrow focus on highly differentiated products.
• C) It requires companies to construct the most efficient facilities in terms of scale or technology and obtain the largest share of market.
• D) It has become increasingly popular in recent years as a result of the popularization of the experience curve concept.

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Definitions:

FIFO

First In, First Out, an inventory valuation method that assumes that the first items placed in inventory are the first sold.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and dividends have been accounted for.