One of the Differences Between Stars and Cash Cows Is

question 14

Multiple Choice

One of the differences between stars and cash cows is that:

• A)cash cows produce high profits.
• B)the strategy for cash cows is retrenchment.
• C)cash cows have little upside potential.
• D)cash cows can easily penetrate expanding markets.
• E)the strategy for cash cows is growth.

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Definitions:

Low-value Customers

Customers who contribute minimally to a company's profitability, often requiring more resources than they generate in revenue.

Arbitrage

The practice of buying and selling assets in different markets or forms to profit from differing prices for the same asset.

Predatory Pricing

A strategy where a firm sets prices below cost with the intention of driving competitors out of the market, and then possibly raising prices to higher levels once competition is reduced.

Mark-up Pricing

A pricing strategy where a fixed percentage is added to the cost of producing a good or service to determine its selling price.