Ch5

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

Return on their risk capital

What does SGA stand for

Sales, General & Administrative

The legal owners of publicly traded companies are called ____?

Shareholders

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

fixed

To understand how effectively a firm uses its total invested capital, one can use this ratio

ROIC

In their annual filling with the SEC, public companies in the US must report what?

-Benchmarks -The total return to shareholders

What dimensions make up the triple bottom line?

-Ecological -Economic -Social

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

-Inventory Turnover -Fixed Asset Turnover -Payables Turnover -Receivables Turnover

What frameworks provide a relatively holistic perspective on firm performance

-balanced scorecard -triple bottom line

Answering the Balanced Scorecard question of "how we create value?" challenges manager to develop strategic objectives that ensure future _________.

-competitiveness -organizational learning -innovation

What does the balanced scorecard framework enable managers to do?

-design and plan business processes -communicate and link the strategic vision -translate the strategic vision into operational goals -implement feedback and organizational learning

Which are some industries that use a subscription model?

-magazines -cellphone providers -internet providers

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

-quantitative -qualitative

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

-structures -processes -culture

What are key to understand as part of the balanced scorecard?

-the views shareholders have of the company -customers perceptions of the company -the required core competencies for success -the ways in which the company creates value

What does BHAG stand for

Big Hairy Audacious Goal

To determine how effectively a company can produce a good, managers look to the

COGS/revenue ratio

If Tom would have paid $1000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered

Consumer Surplus

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

True or False: When companies commit to sustainable strategies, they do so purely out of a spirit of charity, with an understanding that doing so will hut the bottom line

FALSE

When a company has a low payables turnover ratios, it indicates

More efficient management in paying creditors and generating interest-free loans from suppliers

A firm generates ________ when its cost of capital is lowers than its ROIC

Value

In a subscription-based business model, customers pay for _____

access to a product or service

Opportunity cost refers to the value of what could have been gained had a person pursued

an alternative use of his/her resources

Under a wholesale model, retailer sell good for

any price they want

The Primary reason for analyzing key financial ratios is to

assess competitive advantage

In order to ensure that a firm is implementing the triple-bottom line approach successfully, managers must

audit the company's results in fulfilling its social and ecological obligations

With a ______ ________, firms describe how they turn strategy into action

business model

Benchmarks are useful in determining a firm's

competitive advantage

Given that compared to the past importance of intangibles has increased, the importance of the firm's book value has _______ as part of a firm's total stock market valuation

decreased

To measure firm-level competitive advantage, a company must

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

A balanced scorecard approach helps managers balance ______ goals

financial and strategic

A stock prices increases if it

grows faster than expected

A balanced scorecard is a tool for strategy

implementation

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

much more important

When you join Zoooom, you are allow to use a motorized scooter whenever you like, though you do have to own the machine. You have to pay by the hours of usage. Zooooom operates on a _____ model

pay as you go

When a firm tried to meet the prices of its competitors, it typically sacrifices

profitability per unit

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

relative profitability

The subjectively determined maximum amount a customer would pay for a product is is _____ price

reservation

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

Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the

total return to shareholders

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

underperform

What are considered off-balance sheet items?

Pension obligations & operating Leases

When a company offer video-game consoles at a steep discount, but charges customer high fees for games, they are operating a ________-_________ business model

Razor-Razorblades

When a company operated on a freemium model, premium services cost money but basic services are _____

free