Ch. 5
A company's stock price increases if the company ____
Grows faster than expected
A balanced scorecard is a tool for strategy ____
Implementation
Economic value created is the ___ the cost to produce a product/service and the amount the buyer is willing to pay for it
Difference between
The balanced scorecard approach helps managers balance ___ goals (2 things)
Financial and strategic
From the view of a shareholder, the measure of competitive advantage that matters most is return on
Risk capital
What dimensions make up the triple bottom line?
1. Ecological 2. Economic 3. Social
What are two off-balance sheet items?
1. Operating leases 2. Pension obligations
What are two performance dimensions that matter in judging the effectiveness of a firm's strategy?
1. Qualitative 2. Quantitative
What 2 frameworks work to provide a more holistic perspective on firm performance?
1. Triple bottom line 2. Balanced scorecard
The acronym BHAG stands for?
Big Hairy Audacious Goals
A firm uses the ____ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices
Bundling
The financial metric RIOC stands for return on invested _____
Capital
Public companies are required by law to release detailed accounting data, which enables ____
Comparative analysis of firms
When implementing the razor-razorblade strategy, companies make their profit from ____
Complementary goods
The firm's accounting profitability, ability to create shareholder value, and ability to generate economic value tend to be ____
Correlated
Since about the year 2000, assets not captured in firm's accounting data have become ____ to a firm's competitive advantage
Much more important
When a firm does favorably compared to similar firms, it is said to ___
Outperform
Another name for producer surplus is ____
Profit
Economic value creation is calculated as ___
The sum of consumer and producer surplus
What is a true statement about shareholders of a public company?
They can be individuals or organizations
Wholesaling is considered a ____ business model
Traditional
The freemium business model can be considered an evolutionary variation on the razor-razor-blade model. T/F
True
Compared to the past, the importance of firm's intangibles has increased. Therefore the importance of a firm's book value has ____ as part of the firm's total stock market valuation
Decreased
Premium services cost money with complimentary basic services, is a description of which type of business model?
Freemium
For a product that has a large economic value, a firm can choose to charge the same price as competitors in order to _____
Gain market share
To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as ____
SG&A/Revenue
In order to determine market capitalization, what do you multiply?
Share price and number of outstanding shares
The legal owners of publicly traded companies are called ___
Shareholders
According to ___ theory, a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies
Stakeholder
When a person decides to quit their job and start a company, the salary that person gave up when quitting can be considered ____
An opportunity cost