445 Ch. 5 - Competitive Advantage

Which of the following statements is true of the balanced-scorecard? A. It attempts to provide a holistic perspective on firm performance. B. Its primary focus is to base a firm's strategic goals entirely on external performance dimensions. C. It is a more or less a one-dimensional metric of measuring competitive advantages of a firm. D. It is one of the traditional approaches of measuring firm performance.

A. It attempts to provide a holistic perspective on firm performance.

The tenet behind the triple-bottom-line is that A. a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. B. a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue. C. a firm's primary objective should be increasing the total returns to its shareholders. D. a firm should solely focus on increasing the economic value created to/for its customers.

A. a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

A high percentage of R&D/Revenue ratio indicates a(n) A. strong focus on innovation to improve current products and services. B. inefficiency in the management to focus on new products. C. strong focus on marketing and sales to promote products and services. D. negligent investment toward research and development.

A. strong focus on innovation to improve current products and services.

Which of the following statements is true of accounting data? A. Accounting data consider off-balance sheet items, such as pension obligations of a firm. B. Accounting data are historical data and thus backward-looking. C. Accounting data focus mainly on intangible assets, rather than tangible assets. D. Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.

B. Accounting data are historical data and thus backward-looking.

________ are the legal owners of public companies. A. Employees B. Shareholders C. Category captains D. Creditors

B. Shareholders

How does a firm capture its producer surplus for a good or service? A. as cost per unit sold B. as profit per unit sold C. as earnings per share D. as market price per share

B. as profit per unit sold

The balanced-scorecard can accommodate A. only short-term performance metrics. B. only long-term performance metrics. C. both short- and long-term performance metrics. D. neither short- or long-term performance metrics.

C. both short- and long-term performance metrics.

A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television priced at $500. The difference of $200 ($600 minus $400) is the A. customer lifetime value. B. total return to shareholders. C. economic value created. D. consumer surplus.

C. economic value created.

Which of the following statements about competitive advantage is true? A. Competitive advantage is a one-dimensional concept. B. Competitive advantage is permanent and not transitory; once gained by a firm it stays with the firm. C. Competitive advantage is an absolute measure; it is not relative. D. Competitive advantage can be assessed by measuring accounting profit, shareholder value, or economic value.

D. Competitive advantage can be assessed by measuring accounting profit, shareholder value, or economic value.

How does a sustainable strategy typically help a firm? A. It helps the firm focus solely on its financial goals. B. It reduces the need for corporate social responsibility within the firm. C. It facilitates the firm in effectively isolating its external stakeholders. D. It helps the firm achieve positive results along the social and ecological dimensions.

D. It helps the firm achieve positive results along the social and ecological dimensions.