Explore BrainMass

Business Strategy

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Your company plans to build a new factory next year that cost $100 Million? Identify three methods to finance this expansion. Choose one method to finance your expansion. Explain your choice and explain why it is better than the other two alternate source of funding you identified.

Explain the term "Economy of Scale." Briefly explain how and when a firm might benefit from using the Economy of Scale.

Explain why a company should analyze the actions of their competitors. What is likely to happen if you do not analyze your competitors? What is likely to happen if you analyze your competitors? Explain both.

Briefly explain the five forces of the Competition Model. Which is the most important and Why?

Identify and explain your CapSim team strategy. Explain why you selected that strategy and defend how your team implemented the strategy to top management of the company. Explain why some products succeeded and others failed. Considering Round 3 results, and you were the CEO what would you do to improve your company.

© BrainMass Inc. brainmass.com October 25, 2018, 2:44 am ad1c9bdddf

Solution Preview

Your company plans to build a new factory next year that cost $100 Million? Identify three methods to finance this expansion. Choose one method to finance your expansion. Explain your choice and explain why it is better than the other two alternate source of funding you identified.

Three methods of financing the factory are a public issue of shares, bank loan, or an issue of bonds. The method that I will chose to finance the new factory will be IPO. The reason is that my company has a good reputation and has been profitable in the past so it will not have difficulty in raising equity in the stock exchanges. The other two options namely bank loan and bonds are ruled out because they increase the financial risk of my company. The company in case of the other two options will be forced to make interest and loan repayments which may cause a financial drain on the company.

Explain the term "Economy of Scale." Briefly explain how and when a firm might benefit from using the Economy of Scale.
The economy of scale is the savings that a big firm can achieve because the cost of initial investment can be spread across very large number of production units. This is a situation where the increase in the scale of the firm leads to a fall in the long term average cost. In other words if the cost of producing each unit decreases with increasing output there is economy of scale.

A firm will ...

Solution Summary

This posting gives you an in-depth insight into Business Strategy

See Also This Related BrainMass Solution

Can someone assist with Business Strategy and Competition?

Business Strategy And Competition

Please answer the below questions.

1. Define strategic competitiveness and above-average returns. What is the relationship between strategic competitiveness and returns on investment?

2. Hypercompetition is a characteristic of the 21st-century competitive landscape. Define hypercompetition and identify its primary drivers. How can organizations survive in a hypercompetitive environment?

3. Describe the industrial organization (I/O) model of above-average returns. What are its main assumptions? What is the key to success according to the I/O model?

4. Describe and discuss the resource-based model of above-average returns.

5. What are a firm's vision and mission? What is the value to the firm of having a specified vision and mission?

6. Describe an organization's various stakeholders and their different interests. Under what condition can the firm most easily satisfy all stakeholders? If the firm cannot satisfy all stakeholders, which ones must it satisfy in order to survive?

7. Who are the firm's strategic leaders? How do strategic leaders predict the profit outcomes of different strategic decisions?

8. Explain the relationship of the strategic management process to organizational ethics.


1. Explain why it is important for organizations to analyze and understand the external environment.

2. Identify and describe the three major parts of the external environment. What is the purpose of the firm's collecting information about these aspects of its environment?

3. Describe and discuss the four activities of the external environmental analysis process.

4. Describe the six segments of the general environment.

5. Identify the five forces that underlie the five forces model of competition. Explain briefly how they affect industry profit potential.

6. Describe the factors that raise the competitive nature of an industry's rivalry.

7. What are high exit barriers and how do they affect the competition within an industry?

8. What is a firm's strategic group? What effect does the strategic group have on the firm?

9. What do firms need to know about their competitors? What legal and ethical intelligence gathering techniques can be used to obtain this information?


1. Describe the importance of internal analysis to the strategic success of the firm.

2. What are the differences between tangible and intangible resources? Which category of resources is more valuable to the firm?

3. Define capabilities and how they affect the firm's strategic success.

4. Describe the four specific criteria that managers can use to decide which of their firm's capabilities have the potential to create a sustainable competitive advantage.

5. Describe a value chain analysis. How does a value chain analysis help a firm gain competitive advantage?

6. Why is it important to prevent core competencies from becoming core rigidities?


1. Define strategy and business-level strategy. What is the difference between these two concepts?

2. When a firm chooses a business-level strategy, it must answer the questions "Who? What? and How?" What are these questions and why are they important?

3. Discuss how a cost leadership strategy can allow a firm to earn above-average returns in spite of strong competitive forces. Address each of the five competitive forces.

4. Describe the risks of a differentiation strategy.

5. How do focused differentiation and focused cost-leadership strategies differ from their non-focused counterparts?

6. Describe the additional risks undertaken by firms pursuing a focus strategy.

7. Describe the advantages of integrating cost leadership and differentiation strategies.

8. What are the risks of an integrated cost leadership/differentiation strategy?


1. What is market commonality? What is resource similarity? How are these concepts combined to identify the level of competition between two firms?

2. Define awareness, motivation and ability in reference to competitive behavior.

3. What are the advantages and disadvantages of being a first mover, second mover, and late mover?

4. What factors contribute to the likelihood of a response to a competitive action?

5. Name and describe the two types of competitive actions.

6. Define slow-cycle, fast-cycle and standard cycle markets.


1. Differentiate between corporate-level and business-level strategies and give examples of each.

2. What are the five categories of businesses based on level of diversification?

3. Describe the primary reasons a firm pursues increased diversification.

4. Describe how diversified firms can use activity sharing and transfer of core competencies to create value.

5. What are the two ways that an unrelated diversification strategy can create value?

6. What is the effect of a firm's low performance on the pursuit of diversification?

7. What are the managerial motives to diversify?


1. Why have acquisitions been a popular strategy in recent years?

2. Identify and explain the seven reasons firms engage in an acquisition strategy.

3. Describe the seven problems in achieving a successful acquisition.

4. Describe how an acquisition program can result in managerial time and energy absorption.

5. What are the attributes of a successful acquisition program?

6. What is restructuring and what are its common forms?

7. What are the differences between downscoping and downsizing?

8. What is an LBO and what have been the results of such activities?

9. What are the results of the three forms of restructuring?

View Full Posting Details