According to Michael Porter, managers have two basic ways of increasing the value of an organization's product: differentiating the product or lowering the costs of making it. Define each strategy and analyze its impact on profits and the entry of new competitors into the industry.
What will be an ideal response?
With a differentiation strategy, managers focus all the energies of the organization's departments or functions on distinguishing the organization's products from those of competitors on one or more important dimensions, such as product design, quality, or after-sales service and support. The company can then charge a premium price to recoup the added cost of differentiation and still keep profits high. Entry into the industry can be difficult for new companies as they do not have a brand name and it's harder to get customers to view new products as acceptable substitutes for existing differentiated products.
With a low-cost strategy, managers focus the energy of all the organization's departments or functions on driving the company's costs down below the costs of its industry rivals. The company can then sell a product for less and still make a good profit. The cost to enter any industry is high, which makes it hard for new companies to enter if the price point in the industry is low.
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Plaxo Corporation has a tax rate of 35% and uses the straight-line method of depreciation for its equipment, which has a useful life of four years. Tax legislation requires the company to depreciate its equipment using the following schedule: year 1- 50%, year 2 - 30%, year 3 - 15% and year 4 - 5%. In 2014 Plaxo purchases a piece of equipment with a four year life and an original cost of $100,000
. What amount will Plaxo record as a deferred tax asset or liability in 2010? a. Deferred tax asset of $25,000. b. Deferred tax liability of $25,000. c. Deferred tax asset of $8,750. d. Deferred tax liability of $8,750.
If a six sided die is tossed two times and "3" shows up both times, the probability of "3" on the third trial is
A. much larger than any other outcome. B. much smaller than any other outcome. C. the same as any other outcome. D. not able to be determined before the die is tossed.
Which of the following would NOT be a possible topic for a ceremonial speech?
a. A toast to celebrate a wedding b. A business presentation c. A speech about a graduation d. A speech celebrating the success of a business venture
American Clothing Company manufactures clothes to be sold in retail stores. After the clothing is manufactured, it is shipped to wholesalers who, in turn, use transportation companies to ship the product to various retail outlets. The manufacturer, wholesaler, transportation company, and retailer all work together to create and deliver the product. This is an example of
A. communicating value. B. creating value. C. marketing value. D. forecasting value. E. delivering value.