What is a focus strategy? Provide an example where this has been implemented successfully.
What will be an ideal response?
A focus strategy is based on the choice of a narrow competitive scope within an industry. A firm following this strategy selects a segment or group of segments and tailors its strategy to serve them. The essence of focus is the exploitation of a particular market niche. A narrow focus (like merely being different as a differentiator) is simply not sufficient for above-average performance.
The focus strategy, has two variants. In a cost focus, a firm strives to create a cost advantage in its target segment. In a differentiation focus, a firm seeks to differentiate in its target market. Both variants of the focus strategy rely on providing better service than broad-based competitors that are trying to serve the target segment of the focuser. Cost focus exploits differences in cost behavior in some segments, while differentiation focus exploits the special needs of buyers in other segments. Two firms that have successfully implemented focus strategies are LinkedIn and Facebook. LinkedIn has staked out a position as the business social media site of choice. Rather than compete with Facebook head on, LinkedIn created a strategy that focuses on individuals who wish to share their business experience and make connections with individuals with whom they share or could potentially share business ties. In doing so, it has created an extremely strong business model. LinkedIn monetizes its user information in three ways: subscription fees from some users, advertising fees, and recruiter fees. The first two are fairly standard for social media sites, but the advertising fees are higher for LinkedIn since the ads can be more effectively targeted as a result of LinkedIn's focus. The third income source is fairly unique for LinkedIn. Headhunters and human resource departments pay significant user fees, up to 8,200 USD a year, to have access to the LinkedIn recruiting search engine, which can sift through LinkedIn profiles to identify individuals with desired skills and experiences. The power of this business model can be seen in the difference in user value for LinkedIn when compared to Facebook. For every hour that a user spends on the site, LinkedIn generates 1.30 USD in income. For Facebook, it is a paltry 6.2 cents.
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Jerry's Shop had the following assets and liabilities at the beginning and end of the current year: AssetsLiabilitiesBeginning of the year $114,000$68,000End of the year135,00073,000If there were no stockholder investments or dividends paid during the year, what was the amount of net income earned by Jerry's Shop?
What will be an ideal response?
Match each term with the correct statement below.
a. marketing channel b. selective distribution c. warehouse showrooms d. materials handling e. warehouse clubs f. inventory management g. intensive distribution h. exclusive distribution 1. Convenience goods often use this method of market coverage. 2. Large-scale discount operations that are open to members only. 3. The physical handling of a product during transportation and while it is in the warehouse. 4. A group of interrelated organizations that direct the flow of products to the ultimate consumer. 5. The process of developing and maintaining products that are in demand by customers 6. Shopping goods are often distributed through this method of market coverage. 7. Convenience goods often use this method of market coverage.
A small Canadian winery located in British Columbia has developed a superior tasting wine. It has no overseas contacts but wants to get its wine on the shelves in selected Asian and European markets where growth has been substantial in the last two years. What type of exporting option would best suit this company?
A. licensing B. joint venture C. indirect exporting D. cooperative partnership E. direct exporting
A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. If 150,000 tons of ore are mined during the first year, the journal entry to record the depletion is:
A. Debit Depletion Expense $93,750; credit Accumulated Depletion $93,750. B. Debit Cash $93,750; credit Accumulated Depletion $93,750. C. Debit Depletion Expense $93,750; credit Natural Resources $93,750. D. Debit Cash $112,500; credit Natural Resources $112,500. E. Debit Depletion Expense $112,500; credit Accumulated Depletion $112,500.