Step 1: Understanding the Concept:
This is a sentence completion question where the logic is based on contrast. The word "Despite" at the beginning of the sentence is a key indicator of this contrast.
Step 2: Key Formula or Approach:
1. Identify the first part of the contrast: "a string of dismal earnings reports." This is a negative situation.
2. The word "Despite" means that the second part of the sentence will present an opposing or surprising outcome.
3. Therefore, the blank must be filled with a word that indicates a positive development for the company's strategy.
Step 3: Detailed Explanation:
The sentence sets up a contrast between past negative results and a current positive trend.
- Option (D), "work," means to be effective or successful. If the strategy is beginning to "work," it creates the perfect contrast with the "dismal earnings reports."
- Options (A), "falter" (to lose strength), and (B), "disappoint," are negative words. They would be consistent with the dismal reports, but they contradict the logical structure set up by "Despite."
- Options (C), "compete," and (E), "circulate," do not fit the context. A strategy itself doesn't "compete" or "circulate"; it either succeeds (works) or fails.
Step 4: Final Answer:
The word "work" provides the necessary positive contrast to the preceding negative clause, indicating that the strategy is starting to show success.