Which of the Following Is a Defining Characteristic of Prospector

question 16

Multiple Choice

Which of the following is a defining characteristic of prospector firms?

• A) Such firms adopt strategies that focus on deepening their capabilities through technologies that extend rather than replace their current ones.
• B) They tend to adopt an early-follower strategy to grab a dominant position more from their strengths in marketing and manufacturing than from technological innovation.
• C) Executives in such firms tend to be more concerned about the opportunity costs of not taking action than they are about the potential to fail.
• D) Such firms are risk averse and tend to operate in environments that are stable and predictable.
• E) They are less innovative than defender firms because they tend to let others demonstrate solid demand in new arenas before responding.

---

Definitions:

Drawing Account

An account used to record the amounts withdrawn by an owner from the business for personal use.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Common Shares

Equity ownership units in a corporation, entitling holders to voting rights and dividends.

Share Capital

Share capital refers to the funds raised by a company through the issuance of shares, which represent ownership interests in the company.