Complete Question:
Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as;
A. vulnerability to seasonal and cyclical downturns, vulnerability to driving forces, and vulnerability to fluctuating interest rates and exchange rates.
B. relative market share, the ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and the ability to benefit from strategic fits with sister businesses.
C. the appeal of its strategy, the relative number of competitive capabilities, the number of products in each business's 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:
B. relative market share, the ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and the ability to benefit from strategic fits with sister businesses.
Explanation:
Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as;
1. Relative market share: this measures the subsidiaries position in a market in relation to its competitors in the same industry. It is a measure of the percentage of the market they control.
2. The ability to match or beat rivals on key product attributes: this is really important in the assessment of competitive strengths because it represents the level of acceptance of their products by consumers in comparison with rivals.
3. Brand image and reputation: if the subsidiary is well accepted by the consumers, it simply suggests that they have a good brand image and reputation in the market. A good brand image and reputation is competitive strength.
4. Costs relative to competitors: the higher the price a company is selling its products relative to rival companies, the lesser its sales would be because consumers would naturally go for cheaper products or lower prices.
5. The ability to benefit from strategic fits with sister businesses: companies should be able to achieve their set goals and objectives from opportunities presented by their sister company.
<em>Hence, the competitive strength of a diversified company and its subsidiaries should be assessed based on the aforementioned factors</em>.
