A firm trying to close a profitability gap is concentrating on its most profitable products and abandoning markets that it cannot win.Which strategy is the firm most likely using?

Question

Quizplus · Accepted Answer

The strategy being used here is rationalization, which involves focusing on the most profitable products and abandoning markets that do not generate enough profits. Capacity utilization refers to using existing resources more efficiently, forward integration involves expanding into downstream operations, and segmentation involves dividing a market into smaller groups with different needs and preferences. None of these strategies are directly related to closing profitability gaps.

A Firm Trying to Close a Profitability Gap Is Concentrating