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2 November, 06:48

What is the relevance of quantitively measauring the competitive strength of each business in a diversified companys business portfolio and determining which business units are strongest and weakest?

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  1. 2 November, 09:43
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    The response options are as follows:

    to. to have a quantitative basis for rating them from strongest to weakest in terms of contributing to the corporate parent's revenue growth.

    b. to compare resource strengths and weaknesses, business by business.

    c. to have a quantitative basis for identifying which businesses have large / small competitive advantages or competitive disadvantages vis-a-vis the rivals in their respective industries.

    d. to have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries.

    and. to have a quantitative basis for rating them from strongest to weakest in terms of contributing to the corporate parent's profitability.

    The correct answer is: d. to have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries.

    Explanation:

    One of the keys to successful business is competitiveness, which is understood as the ability of a company to maintain constant growth, in terms of ability to design, produce or market goods and services. Including an analysis of competitiveness, as part of the strategic planning of a company, allows you to know in detail what is happening internally and externally. In addition, it serves to detect the different opportunities and threats (external), weaknesses and strengths (internal) of a company. Also, knowing the degree of competitiveness is vital to understand how to project in the future and how to act to achieve the goals effectively and efficiently.

    A competitive company is able to react quickly and correctly, a skill that is developed through the observation of factors. It is a concept of comparative nature since it is measured through parameters of efficiency and quality of the other companies that compete in the regional, national or world market. Four attributes converge in the competitiveness of a company: the conditions of the factors and those of the demand, the support and related industries. The different combinations that may arise from these attributes are what determine whether a company is a successful case of competitiveness or not. In other words, effective combinations lead to innovation, growth, increasing levels of efficiency, etc.
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