Porter's Generic Strategies Framework Combines the Market Scope and Sources

question 70

True/False

Porter's generic strategies framework combines the market scope and sources of competitive advantage which generate four generic strategies that an organization can pursue to gain a strategic advantage.

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Definitions:

Nonsystematic Standard Deviation

A measure of the dispersion of returns on an investment due to factors specific to an individual asset or company, not the market.

Equally-Weighted Portfolio

An investment portfolio in which each asset is invested in with an equal amount of capital, providing diversification and reducing risk.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Security Market Line

A line drawn on a graph that shows the relationship between risk and the expected return of the market, used in the capital asset pricing model to determine a security's risk premium.