According to Michael Porter, superior profitability goes to a firm that:
A. creates similar products as their competitors.
B. keeps the gap between value and cost of production smaller than the gap attained by competitors.
C. drives down the cost structure of its business.
D. has the highest cost structure in the industry.
E. has the least valuable product in the industry.
C
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The last component in developing or changing a business strategy is _____.
Fill in the blank(s) with the appropriate word(s).
Acton Company is a price-taker and uses target pricing
Refer to the following information: Production volume 602,000 units per year Market price $30 per unit Desired operating income 17% of total assets Total assets $13,700,000 Variable cost per unit $17 per unit Fixed cost per year $5,500,000 per year With the current cost structure, Acton cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that variable costs cannot be reduced, what are the target fixed costs per year? Assume all units produced are sold. A) $5,497,000 B) $5,500,000 C) $12,560,000 D) $10,234,000