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Essentials of Strategic Management 3rd Edition by Charles Hill ,Gareth Jones
Edition 3ISBN: 978-1111525194Essentials of Strategic Management 3rd Edition by Charles Hill ,Gareth Jones
Edition 3ISBN: 978-1111525194 Exercise 2
What do you think are the sources of sustained superior profitability?
Explanation
Verified
Verified
Following are the sources of superior profitability:
• Exclusive rights for sales and distribution
Holding exclusive rights for sales and distribution is a very important source for sustained profitability. Such products and services are not available elsewhere. So, the firm will be always in a profitable position.
• Superior products and services
Any company offering superior products and services in competition will attract more number of customers. Thus company will be profitable for long term.
• Economy of scale
Any company producing big amount will enjoy economies of scale. Per unit cost of production would be low. It will add to the profit of the company.
• Strong marketing strategy
Strong marketing will lead to more sales and a bigger market share. More sales will lead to more profitability.
• Excellent operations
If the backend operations of the company will be good, there will be less wastage and defects. It will reduce the losses due to wastage and defects. So, the profitability of the company would increase.
• Exclusive rights for sales and distribution
Holding exclusive rights for sales and distribution is a very important source for sustained profitability. Such products and services are not available elsewhere. So, the firm will be always in a profitable position.
• Superior products and services
Any company offering superior products and services in competition will attract more number of customers. Thus company will be profitable for long term.
• Economy of scale
Any company producing big amount will enjoy economies of scale. Per unit cost of production would be low. It will add to the profit of the company.
• Strong marketing strategy
Strong marketing will lead to more sales and a bigger market share. More sales will lead to more profitability.
• Excellent operations
If the backend operations of the company will be good, there will be less wastage and defects. It will reduce the losses due to wastage and defects. So, the profitability of the company would increase.
Essentials of Strategic Management 3rd Edition by Charles Hill ,Gareth Jones
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