Which strategy can help managers boost their company's earnings per share (EPS)?

Achieving a significant cost-based competitive advantage is a highly effective strategy for boosting a company's earnings per share (EPS). When a company can produce its goods or services at a lower cost than its competitors, it can either increase its profit margins or lower its prices to gain market share without sacrificing profitability. This advantage allows the company to generate higher revenues relative to its costs, ultimately contributing to greater net income.

Higher net income directly impacts EPS since EPS is calculated as net income divided by the number of shares outstanding. By focusing on cost efficiency, a company can maximize its profit potential, which in turn enhances the earnings figure used in calculating EPS. This strategy could also enable the company to reinvest those savings into growth initiatives or to distribute them as dividends, both of which can further bolster investor confidence and potentially lead to a higher stock price.

While expanding into new geographic markets, investing in online marketing, or reducing employee training expenses might have some positive effects on financial performance, these strategies do not guarantee the same level of direct impact on EPS as establishing a strong cost-based competitive advantage. Expanding into new markets often requires significant investment and carries inherent risks. Marketing expenditures can improve brand visibility and sales but may not directly translate to increased earnings if not managed effectively. Similarly