Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?
What will be an ideal response?
The strategy of striving to be the industry's overall low-cost provider involves offering comparable products that attract a broad spectrum of buyers, usually by underpricing rivals. To achieve a low-cost provider status, a company must incorporate features and services that buyers consider essential, keeping the frills down to a minimum. A company has two options for translating a low-cost advantage over rivals into attractive profit performance. Option 1 is to use the lower-cost edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase total profits. Option 2 is to maintain the present price, be content with the present market share, and use the lower-cost edge to earn a higher profit margin on each unit sold, thereby raising the firm's total profits and overall return on investment.
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In which of the following independent situations would the transaction most likely be characterized as a disguised sale?
A. Partner George contributes appreciated property to the GM Partnership, and three years later GM distributes $100,000 proportionately to the partners. B. Brianna contributes property with a basis of $20,000 and a fair market value of $50,000 to the BGB Partnership in exchange for a 20% interest therein. The partnership agrees to distribute $20,000 to Brianna in 15 months if partnership cash flows from operations exceed $100,000 at that time. The partnership does not expect to produce operating cash flows of over $100,000 for at least five years. C. Luis contributes appreciated property to the BLP Partnership. Thirty months later, he receives a distribution from the partnership of $15,000 cash. None of the other partners received a distribution. There was no agreement that BLP would make the distribution, and Luis would have made the contribution whether or not the partnership made the distribution. D. None of these transactions will be treated as a disguised sale. E. Choices a., b., and c. are all treated as disguised sales.
The _____________, according to Lawrence Lessig, is the place intellectual property is least respected.
Fill in the blank(s) with the appropriate word(s).
A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:
A. Debit Cash $27,500; credit Common Stock $27,500. B. Debit Treasury Stock $27,500; credit Cash $27,500. C. Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. D. Debit Common Stock $27,500; credit Cash $27,500. E. Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.
How does marketing strategy vary according to the level of involvement associated with a product?
What will be an ideal response?