4110 Raper Chapter 8
Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool?
"Try to serve more than one segment with the same strategy"
If an initial stock issuance is $800,000 what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average IPO's in this range?
$200,000
Why is market segmentation an important variable in strategy implementation?
All of the above (allows a small firm to compete with a large firm, allows a firm to operate with limited resources, mass production/distribution/advertising are not always required, market segmentation decisions directly affect marketing mix variables)
Information collection, retrieval, and storage can be used to create competitive advantages in ways such as...
All of the above (cross-selling to customers, monitoring suppliers, keeping managers and employees informed, coordinating activities among division)
What level of management is directly affected by strategy implementation?
All of the above (plant, sales, project, and division managers)
Which item is included in net worth?
All of the above (retained earnings, common stock, additional paid-in-capital)
What is a limitation of using financial budgets?
All of the above (they can be so detailed that they are cumbersome and expensive, they can become a substitute for objectives, they can hide inefficiencies if done only on precedent, they are sometimes used as instruments of tyranny)
Which of these is the most common type of budgeting time frame?
Annual
How should financial budgets be thought of?
As a method for obtaining the most productive and profitable use of an organization's resources
What is the most common type of financial budget?
Cash
Which statement is NOT true?
Computer vulnerability has been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications,k files, and business conducted over the Internet.
After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?
Debt appears to be the best financing alternative
Which of the following is NOT an accepted approach for determining a business' worth?
Determining what the firm's return on investment has been
What is the most widely used technique for determining the best combination of debt and stock?
Earnings per share/earnings before interest and taxes analysis
Who has mandated that every publicly held company in the United States must issue an annual cash-flow statement in addition to the usual financial reports?
FASB
A conservative rule of thumb for measuring the value of a firm is to establish a business' worth to be 10 times the firm's most current annual profit.
False
A firm can usually serve two or more market segments with the same strategy.
False
All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.
False
Although cash budgets can be a useful financial tool, publicly held companies are not required to complete them.
False
As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.
False
Buying off the outstanding shares of your company from the open market to make the company private is what going public means.
False
If the rate of market growth and technical progress is rapid and there are few barriers to possible new entrants, then in-house R&D is the preferred solution.
False
Increased costs are a disadvantage of a good information system.
False
It is okay for firms to create expectations that exceed the service the firm can or will offer if it will attract customers.
False
Limiting an organizations expenditures is the primary purpose of financial budgets.
False
Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.
False
One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.
False
Return on assets is the most widely used technique for determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to implement strategies.
False
Segmenting industrial markets is generally simpler and easier than segmenting consumer markets.
False
Stock issuances are always better than debt for raising capital.
False
Strategy implementation affects top and middle managers but not lower-level employees.
False
The Sarbanes-Oxley Ac has eliminated the problem of firms inflating their financial projections, so stakeholders need not worry about the financial projections of different companies.
False
The most common type of financial budget is the capital budget.
False
The only costs involved in going public are the initial costs.
False
The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.
False
There are five component variables in the marketing mix: product, place, promotion, price, and people.
False
To determining the price-earnings ratio, divide the market price of the firm's annual earnings per share by the common stock and multiply this number by the firm's average net income for the past 10 years.
False
When additional stock is issued to finance implementation of strategy, ownership, and control of the enterprise are strengthened.
False
When performing projected financial analysis, the balance sheet should be prepared before the income statement.
False
A conservative rule of thumb is to establish a business' worth as [BLANK] the firm's current annual profit
Five times
Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?
Interest expense
If a firm incurs a loss during a particular year, or if the firm had positive net income but paid out dividends more than the net income, what happens to the RE amount?
It decreases
Why is market segmentation an important variable in the strategy-implementation process?
It directly affects marketing mix variables
What percent of strategies formulated are successfully implemented?
Less than 10 percent
Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as
Market segmentation
Which two variables rank as marketing's most important contributions to strategic management?
Market segmentation and product positioning
Which variable would be considered part of the "product" element of the marketing mix?
Packaging
In preparing projected statement,s to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?
Percentage-of-sales method
What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry.
Perceptual mapping
Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and ,multiplies this number by the firm's average net income for the past five years?
Price-earnings ratio method
Which of the following variables is NOT directly affected by market segmentation?
Process
What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?
Projected financial statement analysis
Which variable would be considered part of the "place" element of the marketing mix?
Sales territory
Which is NOT a required step in perceptual mapping?
Serve two segments with the same strategy
What becomes a more attractive financing technique when cost of capital is high?
Stock issuance
Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting?
Supply and demand
In projected financial statements, what is used as a plug figure?
The cash account
The attitude of U.S. firms toward R&D is best described by which of the following?
The veil of secrecy being lifted, resulting in more collaboration.
Which of the following is NOT true regarding stock issuances?
They are always better than debt for raising capital
Which of the following is true about two different market segments?
They usually require different marketing strategies
Which of the following is NOT given as an example of a decision that may require finance/accounting policies?
To be a price leader of a price follower.
A current trend in R&D management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products.
True
A financial budget is a document that details how funds will be obtained and spent for a specified period of time.
True
A limitation of financial budgets is that they can hide inefficiencies if based solely on precedent rather than on periodic evaluation of circumstances and standards.
True
A major effort in R&D may be very risky if technology is changing rapidly and the market is growing slowly.
True
A projected financial analysis can be used to forecast the impact of various implementation decisions.
True
A reason for concern over the dilution of company stock is a possible hostile takeover.
True
According to research, the most successful new product companies use a R&D strategy that ties internal strengths to external opportunities and is linked with objectives.
True
Additional capital is often required for successful strategy implementation.
True
After segmenting markets so a firm can target particular customer groups, the next step is to find out what customer groups want and expect.
True
An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.
True
An area on a perceptual map where there is a cluster of ideal points indicates a market segment.
True
An example of a marketing decision is whether or not to limit the share of business done with a single customer.
True
Besides net profit from operations and the sale of assets, two basic sources of funds for an ongoing enterprise are debt and equity.
True
Editorial content and advertising content are increasingly being mixed on blogs.
True
In general, the Internet makes market segmentation easier.
True
In low earning periods, too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival.
True
It is generally not recommended for companies with less than $10 million in sales to go public.
True
Multidimensional scaling involves examining three or more criteria simultaneously in a product-positioning analysis.
True
One R&D strategy is to be an innovative imitator of successful products.
True
R&D policies can enhance strategy implementation efforts to emphasize product or process improvements.
True
Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.
True
The cash account is used as the plug figure in projected balance sheets.
True
The most common bases for segmenting markets are geographic and demographic.
True
The most dramatic new market-segmentation strategy is the targeting of regional tastes.
True
The percentage-of-sales method should be used for projecting the cost of goods sold and the expense items in the income statements.
True
The process of strategic management is facilitated immensely in firms that have an effective information system.
True
With information technology, in some cases it is possible to do away with the workplace by allowing employees to work at home or anywhere, anytime.
True
With market segmentation, a firm can better operate with limited resources.
True
In the context of balance sheet, goodwill represents
a premiums paid over the book value of an acquisition
Retained earnings is obtained by subtracting
any dividends to be paid for that year from the net income
In a low-earnings period, too much [BLANK] in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival?
debt
An area on a perceptual map without ideal points indicates a
demand void
Business analytics...
enables a firm to learn from experience and to make current and future decision based on prior information.
The Financial Accounting Standard Board (FASB) Rule 142 deals with
goodwill
Projected financial analysis is an important strategy-implementation technique because
it allows an organization to examine the expected results of various actions and approaches.
Multidimensional scaling is used to determine
perceptual mapping
The first step in performing projected financial analysis is to
prepare the projected income statement
Evaluating the worth of a firm...
requires both qualitative and quantitative skills.
R&D employees and managers perform all of the following tasks except
researching resource availability
Perhaps the most dramatic new market segmentation strategy is the
targeting of regional tastes
A benefit of using projected balance sheets and income statements is that
the impact of various implementation decisions can be forecasted.
All of the following are examples of marketing decisions that may require policies EXCEPT
to be a market leader or follower