Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as __________.

Question

A) vulnerability to seasonal and cyclical downturns, vulnerability to driving forces, and vulnerability to fluctuating interest rates and exchange rates.
B) relative market share, ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and ability to benefit from strategic fits with sister businesses.
C) the appeal of its strategy, relative number of competitive capabilities, the number of products in each businesses product line, which businesses have the highest/lowest market shares, and which businesses earn the highest/lowest profits before taxes.
D) the ability to hurdle barriers to entry, value chain attractiveness, and business risk.
E) cost reduction potential, customer satisfaction potential, and comparisons of annual cash flows from operations.

Answer 1

B) relative market share, ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and ability to benefit from strategic fits with sister businesses.
Gauging the competitive strength of business units in a diversified company involves calculating quantitative industry attractiveness scores based upon the following eight dimensions: (1) relative market share, (2) costs relative to rivals' costs, (3) products or services that satisfy buyers' expectations, (4) ability to benefit from strategic fit with sibling portfolio businesses, (5) number and caliber of strategic alliances and collaborative partnerships, (6) brand image and reputation, (7) competitively valuable resources and capabilities, and (8) profitability relative to competitors. Quantitative measures of each business unit's competitive strength can be then weighted and calculated using a procedure similar to that for measuring industry attractiveness.