MGT 400 Chapter 5

Evidence suggests that business models are most successful when they include various?

Reinforcing activities

The money a shareholder spends for an equity share in a company is known as ____ capital.

Risk

When trade happens, consumers and producers both capture?

Some of the economic value

When comparing different firms of different sizes over a period of time, it is most useful to look at?

Relative Profitability

A firm pursuing a successful ____ strategy will have a competitive advantage over a competitor that creates a product at equal cost but with a lower reservation price.

differentiation

It is rare for a firm's stock price to increase, unless it

grows faster than expected

A balanced scorecard is a tool for strategy

implementation

In order to be considered a legal owner of a company, a person or organization must

own at least one share of the company's stock

The acronym BHAG stands for?

Big hairy audacious goal

Which of the following would be labeled variable costs by a computer manufacturer?

Display screens Laptop cases Hard drives

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

Examine a consumer's purchasing habits for their revealed preferences.

The legal owners of publicly traded companies are called?

Executives Shareholders

A balanced scorecard approach helps managers balance _____ goals

Financial and Strategic

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

Fixed

On the online site Hulu, anyone can watch certain shows for free but must pay extra to watch certain content. Hulu operates on a _____ business model.

Freemium

Which of the following are considered off-balance sheet items?

Operating leases Pension obligations

A balanced scorecards offers both common financial metrics and a variety of?

Operational measures

When you join Zooooom, you are allowed to use a motorized scooter whener you like, though you do not own the machine. Zoooom operates on a _______ model

Pay-as-you-go

Which of the following are among the three standard dimensions for measuring competitive advantage?

A firm's accounting profitability How much shareholder value a firm creates How much economic value a firm generates

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price?

A firm's past, current state; and expected future performance

To understand how effectively capital creates revenue, a firm can look at its?

Working capital turnover

Federal laws require public companies to release detailed accounting date in order to enable?

Comparative analysis of firms

The firm's book value captures the _____ costs of a firm's assets. Market valuation is based on _____ expectations for a firm's growth potential and performance.

Historical; Future

When one wants to further explore the difference in working capital turnover for two competitors, one can look at which of the following ratios?

Inventory Turnover Receivables Turnover Fixed Asset Turnover Payables Turnover

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

As part of a subscription-based business model, customers pay for?

Access

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

Accounting Profitability

To understand how efficiently a company is in extending credit, companies look at their ratio of revenue to?

Accounts receivables

Which of the following are elements of the social dimension of the triple bottom line?

Achieving work / life balance Human sustainability

In annual filing with the Securities and Exchange Commission, public companies in the U.S. must report which of the following?

Benchmarks The total return to shareholders

With a _____, firms describe how they turn strategy into action.

Business Model

The internet-based service Rover connects dog walkers and dog sitters via a website or smartphone application. In so doing, Rover combines which of the following

Business model innovation Information technology New ideas

When one wants to further explore the difference in return on revenue for two competitors, one can look which of the following three ratios

COGS SG&A expense R&D expense

When managers determine how their company creates value, they are able to pursue strategies that accomplish which of the following?

Competitiveness Innovation Organizational learning

When implementing the razor-razorblade strategy, companies make their profit off?

Complementary goods

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

Achieving completive advantage means maximizing the difference between which of the following?

Consumers' willingness to pay and production costs

Through which of the following do managers implement the blueprint of their business model?

Culture Structures Processes

When a firm creates more ____ value than competing firms, it has a competitive advantage.

Economic

Which of the following dimensions make up the triple bottom line?

Economic Ecological Social

Which of the following are true of a firm's book value?

It captures the historical cost of a firm's assets. Its importance has decline over time. It counts costs of assets minus their depreciation

Which of the following does the balanced scorecard framework enable managers to do?

Translate the strategic vision into operational goals. Design and plan business processes. Implement feedback and organizational learning Communicate and link the strategic vision.

A firm generates _____ when its cost of capital is lower than its ROIC.

value

Which of the following are key to understanding as part of the balance scorecard?

The required core competencies for success Customer perceptions of the company The views shareholder have of the company The ways in which the company creates value

To determine economic value creation, one must look at?

The sum of consumer and producer surplus

The most a consumer is willing to pay for a product is equivalent to a product's?

Total perceived consumer benefits

The measure of competitive advantage that matters the most to shareholders is the?

Total return to shareholders

Wholesaling is considered a ____ model for retail

Traditional

Which of the following frameworks provide a relatively holistic perspective on firm performance?

Triple bottom line Balanced scorecard

When a firm does unfavorably compared to similar firms, it is said to?

Underperform

Which of the following performance dimensions matter in judging the effectiveness of a firm's strategy?

Quantitative Qualitative

Since about the year 2000, assets not captured in firms' accounting data have become ____ to a firm's competitive advantage.

Much more important

Which of the following are considered disadvantages of the shareholder value creation approach?

Stock prices can be highly volatile Overall macroeconomic factors have a direct baring on stock prices Stock prices frequently reflect the psychological mood of investors

When a company defines a set of actions it will take to outdo competitors, it formulates a?

Strategy

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

The balance scorecard

To determine a product's producer surplus, which of the following must be compared?

The price charged The cost of production

To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as what?

SG&A/revenue

According to _____ theory, a firm exists within an interconnected network of constituencies, both within and without the organization, and that the firm is responsible to these constituencies.

Stakeholder

Which of the following are among the most commonly used metrics for comparing the performance of different companies?

Return on assets Return on equity Return on invested capital

When a firm tries to meet the prices of its competitors, it typically sacrifices gains in?

Profitability per unit

In order to provide a benchmark of a computer firm's performance relative to other firms in the computer industry, one would be best of looking at the?

NASDAQ index

In order to determine market capitalization, one multiplies which of the following together?

Number of outstanding shares. Share Price

When a company has a low payables turnover ratio, it indicates the company has?

More efficiently managed paying creditors