Samsung is concerned about its competitive advantage with regard to its mobile d
ID: 1147410 • Letter: S
Question
Samsung is concerned about its competitive advantage with regard to its mobile devices and generates a value chain to conduct a cost analysis with Apple. Of the following, which would be the most important to consider in this analysis?
Compare overall cost positions of the two companies.
Compare cost positions only for comparable products.
Compare cost positions for the average products for each company.
Include Samsung’s capital expenses for its new manufacturing site.
Exclude consideration of customers’ willingness to pay at this time.
a.Compare overall cost positions of the two companies.
b.Compare cost positions only for comparable products.
c.Compare cost positions for the average products for each company.
d.Include Samsung’s capital expenses for its new manufacturing site.
e.Exclude consideration of customers’ willingness to pay at this time.
Explanation / Answer
(b) Since Samsung wants to generate a value-chain to conduct a cost analysis with Apple with regards to its comparative advantage in mobile devices, thus it should compare cost positions of only comparable products (mobile phones in this case).
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