Question

Two analytical tools useful in determining whether a company’s prices and costs are competitive are: Select one: a. SWOT analysis and key success factor analysis b. Value chain analysis and benchmarking c. Driving forces analysis and SWOT analysis d. Competitive position and advertising

Answer 1

Answer: b. Value chain analysis and benchmarking

Explanation:

Value chain analysis is all about focusing on the internal activities of a company with a goal to understand how the various products and internal systems combine to give the company an edge. It works by understanding costs and locating the more valuable products in the company and using them to gain a competitive advantage over their rivals. It can therefore be used to find out if a Company's products are doing well against other companies in the industry.

BENCHMARKING is another analytical tool that is indispensable in Competitive comparison. BENCHMARKING is simply comparing a company to another company or the industry at large by using business processes or performance metrices. Companies essentially take a matrix and compare it to the matrix of another company or the average matrix for the industry. For example, a Return on Equity could be compared with that of another company to see if they are Competitive in the industry.