Question

Suppose that during 2013, the market for Stanmore’s special-purpose machines grew by 3%.
In Exercise 12- 22, Stanmore Corporation makes a special- purpose machine, D4H, used in the textile industry. Stanmore has designed the D4H machine for 2013 to be distinct from its competitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2012 and 2013.

.:.
All increases in market share (that is, sales increases greater than 3%) are the result of Stanmore’s strategic actions. Calculate how much of the change in operating income from 2012 to 2013 is due to the industry-market-size factor, product differentiation, and cost leadership. How successful has Stanmore been in implementing its strategy? Explain.



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  • CreatedMay 14, 2014
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