Question

A company's business model determines?

1) whether its strategy will be ethical or not
2) how the strategy will result in achieving sustainable competitive advantage
3) a customer value proposition and develops a profit formula
4) how the company plans to outmaneuver and outcompete key rivals and become a market leader
5) the actions and approaches that it will rely on to earn the best profit margins in the industry

Answer 1

A company's business model helps define the customer value proposition, profit formula, production and cost conditions, and informs strategies for achieving sustainable competitive advantage.

Step-by-step explanation:

A company's business model is crucial in determining several aspects of its operations and strategy. Specifically, it helps in defining:

• A customer value proposition and how to develop a profit formula.
• The production and cost conditions each firm is facing, as well as the market structure, which is crucial for making informed decisions about what products to produce, the production process, output, and pricing.
• Techniques for achieving a sustainable competitive advantage by considering elements like market power, the similarity of products, and barriers to entry for new firms.

The model does not directly determine whether the company's strategy will be ethical or not. However, businesses often create a code of ethics to outline permissible and non-permissible actions in alignment with laws, regulations, and societal values. The decision-making process is influenced by a goal to make a profit and by the need to remain competitive in a market that does not guarantee customer purchases.