MGMT 498 Chap 8

The balanced scorecard framework draws from which of the following?

from multiple internal and external performance metrics

The money a firm spends to set up a sales website can be considered a ______ cost.

fixed

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

Which of the following is true about shareholders of a public company?

They can be individuals or organizations.

Which of the following statements are true about the rival businesses Apple and Microsoft? (Check all that apply.)

-Apple introduced a series of popular consumer electronic devices. -Microsoft leveraged its computer operating system to sell other software programs.

Which of the following correctly describe the information used for comparing the performance of public companies based on accounting profitability? (Check all that apply.)

-The relative performance is evaluated using standardized financial metrics. -The information is filed in a 10-K report. -The information is derived from such data as income statements and balance sheets.

The Luminarium Corporation has a market capitalization of $100,000,000, and each share is worth $100. How many outstanding shares of Luminarium Corporation are there?

1,000,000

Which of the following statements is best illustrated by the decades-long business rivalry between the technology giants Apple and Microsoft?

A firm's competitive advantage is transitory.

True or false: The best measure of competitive advantage can be found in the performance of specific departments.

False

Which of the following statements is true about a firm's stock price?

The price determines in part the stock's market valuation.

When competitive advantage is assessed from an analysis of publicly available data, a firm measures its ______.

accounting profitability

When a firm goes bankrupt, shareholders ______.

cannot recover their risk capital

Combining the razor-razor-blade model and the subscription model means that telecom providers make their money through lengthy service plans, which in turn means that it is crucial that they keep their ______ rate, or the proportion of subscribers who leave, down.

churn

Public companies are required by law to release detailed accounting data, which enables ______.

comparative analysis of firms

The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______.

economic value created

To measure firm-level competitive advantage, a company must ______.

estimate the economic value created for all products and services offered by the firm

To determine the value of a good in the eyes of consumers, a firm can ______.

examine consumers' purchasing habits for their revealed preferences

Fixed costs are ______ consumer demand.

independent of

Another name for producer surplus is

profit

From the view of a shareholder, the measure of competitive advantage that matters most is return on ______.

risk capital

The legal owners of publicly traded companies are called ______.

shareholders

Investors in a company are mostly concerned about the company's ______.

total return to shareholders

When implementing the razor-razorblade strategy, companies make their profit from ______.

complementary goods

When a company offers video-game consoles at a steep discount, but charges customers high fees for games, they are operating on a ______ business model.

razor—razor-blade

Which of the following statements are true concerning a firm's business model? (Check all that apply.)

-It indicates the way the firm works with buyers and suppliers. -It essentially explains how the firm intends to make money. -It details the firm's competitive tactics and initiatives.

Which of the following statements about the disadvantages of the value creation perspective are correct?

-It is difficult to determine the value that consumers place on a given good. -For large firms, it is difficult to estimate the economic value created for all products and services offered by the firm. -The value that a consumer places on a good can vary according to how the consumer feels at a particular moment.

To determine a product's producer surplus, which of the following must be compared? (Check the two that apply.)

-The price charged -The cost of production

Which of the following are standard performance dimensions for a company? (Check all that apply.)

-a firm's accounting profitability -how much economic value a firm generates -how much shareholder value a firm creates

Which of the following are elements of the social dimension of the triple bottom line? (Check all that apply.)

-achieving work/life balance -human sustainability

Which of the following would be labeled variable costs by a computer manufacturer? (Check all that apply.)

-display screens -hard drives

Which of the following dimensions make up the triple bottom line? (Check all that apply.)

-ecological -economic -social

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price? (Check all that apply.)

-expectations of the firm's future performance -a firm's current state -a firm's past

Which of the following performance dimensions matter in judging the effectiveness of a firm's strategy? (Check all that apply.)

-qualitative -quantitative

Which of the following are among the most commonly used metrics for comparing the performance of different companies? (Check all that apply.)

-return on equity -return on revenue -return on assets

In order to determine market capitalization, one multiplies which of the following together? (Check all that apply.)

-share price -number of outstanding shares

Which statements about creating and implementing an effective business model are true?

-Firms must implement their competitive strategy blueprint through processes, procedures, culture, and structure. -Firms must transform their competitive strategy into a blueprint of initiatives and actions that support their goals.

Achieving competitive advantage means maximizing the difference between which of the following? (Check the two that apply.)

-cost to produce the good or service -consumers' willingness to pay

Managers implement the blueprint of their business model through which of the following? (Check all that apply.)

-culture -processes -structures

When managers analyze a wide variety of internal and external performance metrics in order to set financial and strategic goals, they often turn to a framework known as ______.

balanced score card

If Tom would have paid $1,000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered his ______.

consumer surplus

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 business model used by telecommunication companies when they provide a basic cell phone at no charge when the customer signs a two-year contract is a combination of which of the following types of business models? (Check all that apply.)

razor--razor-blade subscription

In general, a firm generates ______ when its cost of capital is lower than its ROIC.

value