Wk 2 - Practice: Ch. 5, Competitive Advantage, Firm Performance

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

Another name for producer surplus is_________

Blank 1: profit

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

Fixed

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

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

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

Fixed costs are ______ consumer demand.

independent of

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

quantitative qualitative

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 ______.

the balanced scorecard

A company's total return to shareholders consists of which of the following?

Stock price appreciation Dividends received

Which of the following correctly describe the information used for comparing the performance of public companies based on accounting profitability?

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

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

They can be individuals or organizations

Netflix had a successful business model based on a large library of streaming content but then achieved even more success by also producing and distributing original content. This is an example of the potential value of ______

business model innovation

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

Cost to produce the good or service Consumers' willingness to pay

Which of the following statements are true concerning a firm's business model?

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

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

When implementing the razor-razor-blade strategy, companies make their profit from

complementary goods

Managers implement the blueprint of their business model through which of the following?

culture processes structures

The balanced scorecard approach helps managers balance ______ goals.

financial and strategic

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 are standard performance dimensions for a company?

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

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

human sustainability achieving work/life balance

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

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

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

social economic ecological

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

total return to shareholders

Which of the following statements are true about the rival businesses Apple and Microsoft?

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

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

False

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.

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

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 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

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?

subscription razor--razor-blade