New entrants are attracted when the organizations’ profits are well in excess of the cost of capital. At the same time the threat of entry depends on the existence of barriers to entry and the reaction of existing competitors. Analyze barriers which make the threat of entry low with examples.
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New entrants are attracted when the organizations’ profits are well in excess of the cost of capital. At the same time the threat of entry depends on the existence of barriers to entry and the reaction of existing competitors.
Analyze barriers which make the threat of entry low with examples.
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- How much is a customer worth? How much does it cost to acquire an additional one? This is the focus of Peters' plan for a successful early exit when the business model is yet to show any profit. However, investors will also have to consider other factors. Which factors are not covered in Peters' analysis?One way that organisations compete is through technological innovation. However, there can be downsides for both the organisation and the consumer. Explain and provide specific example.What should a company do when the cost of eliminating the conditions that create an IT risk exceeds the potential losses that may occur? a. Accept the risk b. Reduce the risk c. Avoid risk d. Transfer the risk
- Which of the following limits the market from becoming a fully efficient market? New information takes time to process. Obtaining new information is costly. The existence of closed end investment companies. Both a. and b. are correct. All of the above answers are correct. None of the above answers is correct.Companies have found that offering discounts to customers in return for early payment can be counterproductive in terms of the resulting adverse effect on profitability. This is when the reduction in profitability outweighs any marginal improvements gained from the benefit of a reduction in the working capital requirement. Required: Critically evaluate the methods that can be adopted to manage and achieve the efficient control of inventories and gain the resulting benefits for improving cashflow and ultimately profit in a business.Examples of systematic risk include a new competitor in the marketplace with the potential to take significant market share from the company invested in, a regulatory change(which could drive down company sales), a shift in management, or a product TRUE OR FALSE?
- What is the fundamental flaw in utilizing income from operations as a success metric for investment centers?What is the primary disadvantage of utilizing revenue from operations to evaluate investment centers' performance?Which of the following is NOT normally regarded as being a good reason to establish an ESOP? a. To help retain valued employees. b. To increase worker productivity. c. To make it easier to grant stock options to employees. d. To enable the firm to borrow at a below-market interest rate. e. To help prevent a hostile takeover.
- Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt? a. The ability to raise additional funds via borrowings b. A letter of guarantee from a parent company c. The ability to sell an unprofitable segment of the business d. Significant rapid increase in competitionFrom an investor perspective ESOPs are the most valuable if used to help prevent takeovers but are much less valuable if designed and used to help improve worker productivity. IS THE SATEMENT TRUE OR FALSE?'Market structures are often criticised for being too unrealistic in their assumptions of how firms operate. However, they can serve as beneficial to businesses as they enter new markets'Discuss this statement by drawing on the market structures