MGT 491 SB Ch. 5

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

False

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

ecological social economic

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

fixed

The balanced scorecard framework draws from which of the following? from internal metrics only from external metrics only from the same metrics applied to internal resources and the external environment from multiple internal and external performance metrics

from multiple internal and external performance metrics

In order to be considered a legal owner of a public company, a person or organization must ______. own at least two products manufactured by the company own at least one share of the company's stock own a majority of the company's stock be a member of the company's board of executives

own at least one share of the company's stock

From the view of a shareholder, the measure of competitive advantage that matters most is return on ______. risk capital revenue invested capital assets

risk capital

Managers implement the blueprint of their business model through which of the following? (Check all that apply.) voice memos structures culture processes

structures culture processes

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 shareholder analysis the accounting metric framework strategic emergence

the balanced scorecard

A company's total return to shareholders consists of which of the following? (Check all that apply.) Capital depreciation Wages Stock price appreciation Dividends received

Stock price appreciation Dividends received

Which of the following is true about shareholders of a public company? They are eligible to be elected as owners of the company. Those qualified as owners must own at least 100 shares. They must be individuals who are employed by the company. They can be individuals or organizations.

They can be individuals or organizations.

With a(n) ______, firms describe how they turn strategy into action. scorecard plan VRIO framework business model triple bottom line

business model

Another name for producer surplus is ...

profit

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 The overhead costs The number of products sold

The price charged The cost of production

Which of the following statements is true about a firm's stock price? The price is not correlated with the firm's economic value creation. The price tends not to reflect accounting profitability. The price is calculated exactly from the firm's accounting profitability. The price determines in part the stock's market valuation.

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

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price? (Check all that apply.) a firm's political views a firm's past a firm's current state expectations of the firm's future performance

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

When competitive advantage is assessed from an analysis of publicly available data, a firm measures its ______. triple bottom line balanced scorecard accounting profitability economic value created

accounting profitability

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 ______. revenue depreciation consumer cost sharing overhead maximization modeling business model innovation

business model innovation

When a firm goes bankrupt, shareholders ______. are entitled only to a fraction of their investment cannot recover their risk capital can sue for loses are entitled to help pay off debtors owed money by the firm

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. scorecard freemium churn agency

churn

Public companies are required by law to release detailed accounting data, which enables ______. economic value creation a balanced scorecard system shareholder value creation comparative analysis of firms

comparative analysis of firms

Economic value created is the ______ the cost to produce a product/service and the amount the buyer is willing to pay for it. total sum of difference between greater of either lesser of either

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 ______. a profit margin stock price appreciation overhead derivative pricing economic value created

economic value created

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 a profit margin overhead derivative pricing stock price appreciation

economic value created

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 cover opportunity costs maximize profit increase return on invested capital

gain market share

Which of the following would be labeled variable costs by a computer manufacturer? (Check all that apply.) hard drives the administrative assistant manufacturing facilities display screens

hard drives display screens

Which of the following are among the most commonly used metrics for comparing the performance of different companies? (Check all that apply.) return on opportunity return on revenue return on assets return on strategic intent return on equity

return on revenue return on assets return on equity

Investors in a company are mostly concerned about the company's ______. planned emergence return on invested assets opportunity cost total return to shareholders

total return to shareholders

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

value

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

quantitative qualitative

Which statements about creating and implementing an effective business model are true? Firms that wish to be truly innovative and original must avoid using a blueprint, which might be limiting. Firms must implement their competitive strategy blueprint through processes, procedures, culture, and structure. Firms must use a blueprint to come up with strategies for how the firms will compete in the market. Firms must transform their competitive strategy into a blueprint of initiatives and actions that support their goals.

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.

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price? (Check all that apply.) a firm's past a firm's political views expectations of the firm's future performance a firm's current state

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

Which of the following are standard performance dimensions for a company? (Check all that apply.) how much shareholder value a firm creates how much economic value a firm generates how a firm's mission statement relates to its strategic intent the fixed and variable costs a firm's accounting profitability

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

Which of the following are elements of the social dimension of the triple bottom line? (Check all that apply.) improving recycling efforts human sustainability achieving work/life balance reducing overhead costs

human sustainability achieving work/life balance

When implementing the razor-razorblade strategy, companies make their profit from ______. razors initial products complementary goods subscription fees

complementary goods

Achieving competitive advantage means maximizing the difference between which of the following? (Check the two that apply.) cost to produce the good or service advertising costs the number of rival firms consumers' willingness to pay

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

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.) pay-as-you-go subscription freemium razor--razor-blade

subscription razor--razor-blade