MGMT 481 Ch 5 smartbook
If firm B produces a laptop at the same total cost but the reservation price for firm A laptop is $1000 and the reservation price for the laptop is $1200 who has the competitive advantage
B
A firms actual _________ minus is depreciation is called the book value.
Cost of assets
The economic value created is the ______________ ____________ The cost to produce a product or service and the amount the buyer is willing to pay for it
Difference between
When a firm goes bankrupt, shareholders ______. cannot recover their risk capital are entitled to help pay off debtors owed money by the firm are entitled only to a fraction of their investment can sue for loses
cannot recover their risk capital*
When implementing the razor-razorblade strategy, companies make their profit from ______. . razors initial products complementary goods subscription fees
complementary goods*
In order to determine market capitalization, one multiplies which of the following together? (Check all that apply.) Multiple select question. total market value value of the dollar number of outstanding shares share price
number of outstanding shares share price*
Which of the following are considered off-balance sheet items? (Check all that apply.) Multiple select question. owned assets operating leases cash pension obligations
operating leases pension obligations*
Another name for producer surplus is
profit
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. pay-as-you-go motivator-motivation razor—razor-blade wholesale
razor—razor-blade*
In general, a firm generates ______ when its cost of capital is lower than its ROIC. competition debt overhead value
value*
For a product that has a large economic value, a firm can choose to charge the same price as competitors in order to ______. maximize profit gain market share increase return on invested capital cover opportunity costs
gain market share*
Which of the following would be labeled variable costs by a computer manufacturer? (Check all that apply.) the administrative assistant hard drives manufacturing facilities display screens
hard drives display screens*
Which of the following industries use a subscription model? (Check all that apply.) magazines internet providers cellphone providers car rental
magazines internet providers cellphone providers*
When a firm does favorably compared to similar firms it is said to Set a benchmark Outperform File for bankruptcy Go out of business
Outperform
True or False Stock market valuations are often unreliable due to the market fluctuations and are therefore not used to assess competitive advantage.
False
True or False The best measure of competitive advantage can be found in the performance of specific departments
False
When growing popularity of the Internet the pay as you go model is Difficult to apply outside of traditional function Gaining momentum Becoming increasingly niche Dying out
Gaining momentum
Fixed cost are ____________ Consumer demand Reduce by Inversely proportional to Independent of Directly proportional
Independent of
Which of the following statements are true concerning the firms business model It indicates the way the firm works with buyers and suppliers In details the firms competitive tactics and incentives It essentially explains how the firm intends to make money He reports the farms latest accounting probability
It indicates the way the firm works with buyers and suppliers In details the firms competitive tactics and incentives It essentially explains how the firm intends to make money
To determine a products producer surplus which of the following must you compare Sunk calls Price change Total cost of production The overhead cost
Price change Total cost of production
Which of the following performance dimensions matter in judging the effectiveness of a firm strategy Nature international quantitative qualitative
Quantitative and qualitative
Which of the following are strong and most commonly use metrics for comparing the performance of different companies Return on revenue Return on equity Return on strategic intent Return on assets Return on opportunity
Return on revenue Return on equity Return on assets
This business model used a telecommunication company when they provided a basic cell phone at no charge when the customer sign a two-year contract is a combination of which of the following types of business models Pay as you go Subscription Razor razor blade Freemium
Subscription and razor razor blade
Which of the following correctly describe the information used for comparing the performance of public companies based on accounting profitability? (Check all that apply.) Multiple select question. The relative performance is evaluated using standardized financial metrics. The information must be purchased from private investment banks. The information is derived from such data as income statements and balance sheets. 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. The information is filed in a 10-K report.*
Which of the following is true about shareholders of a public company? Those qualified as owners must own at least 100 shares. They are eligible to be elected as owners of the company. They must be individuals who are employed by the company. They can be individuals or organizations.
They can be individuals or organizations.*
Public companies are required by law to release detailed accounting data, which enables ______. economic value creation shareholder value creation a balanced scorecard system comparative analysis of firms
comparative analysis of firms**
The money a firm spends to set up a sales website can be considered a ______ cost. low competitive fixed variable
fixed*
From the view of a shareholder, the measure of competitive advantage that matters most is return on ______. revenue assets invested capital risk capital
risk capital*
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? Multiple choice question. 1,000,000 50,000,000 1,000 10,000,000 Reason: $100,000,000/$100 per share = 1,000,000 shares
1,000,000*
Which of the following statements are true about the rival business is Apple and Microsoft Apples primary business for several decades was to sell computers to corporations Apple introduced a series of popular consumer electronic devices Microsoft almost went bankrupt in late 1990s Microsoft leveraged it's computer operating systems to sell other software programs
Apple introduced a series of popular consumer electronic devices Microsoft leveraged it's computer operating systems to sell other software programs
Netflix had a successful business model based on a large library of streaming content within achieved even more success by also producing and distributing original content. This is an example of a potential value of
Business model innovation
Combining the razor razor blade model in the subscription model means that the telecom providers make their money through lengthy service plans, which in turn means that it is crucial that they keep their _______ right, or the proportion of the Subscribers who leave down
Churn
When you join the vehicle sharing company zoom you are allowed to use a motorized scooter whenever you'd like and you do not have to own the machine. You have to pay by the hour of usage zoom operates on a
Pay as you go model
If a firm has a successful ____________ strategy, It's product will have a high perceived value and the firm will have a competitive advantage over a competitor that creates a product but with a lower reservation price
Product differentiation
Which of the following statements is true about a firm stock price The price is correlated with the firms economic value creation The price determines in part the stock market valuation The price is calculated exactly from the firms accounting probability The price tends not to reflect accounting probability
The price determines in part the stock market valuation
In a subscription-based business model, customers pay for ______. premium service actual usage an agent to sell a product access to a product or service
access to a product or service*
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 ______ . economic value producer surplus consumer surplus reservation price
consumer surplus*
Achieving competitive advantage means maximizing the difference between which of the following? (Check the two that apply.) the number of rival firms cost to produce the good or service consumers' willingness to pay advertising costs
cost to produce the good or service consumers' willingness to pay*
The balanced scorecard framework draws from which of the following? from external metrics only from internal 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 ______. be a member of the company's board of executives own a majority of the company's stock own at least one share of the company's stock own at least two products manufactured by the company
own at least one share of the company's stock*
The subjectively determined maximum amount a customer would pay for a product is its ______ price. reservation unfair overwhelming exploitative
reservation*
Which of the following statements is best illustrated by the decade long business rivalry between the technology giants Apple and Microsoft A firms competitive advantage is transitory A company that shrinks to less than 10% market share cannot grow again significantly Once the company becomes highly dominated in an industry cannot be displaced Technology change has a little influence on affirms competitive advantage
A firms competitive advantage is transitory
Which of the following statements about the disadvantages of the accounting profitability perspective are correct? Multiple select question. Accounting data focus primarily on tangible assets Accounting data focus mostly on intangible assets Accounting data are historical and therefore backward-looking Accounting data are highly volatile and thus difficult to use
Accounting data focus primarily on tangible assets Accounting data are historical and therefore backward-looking*
Managers implement the blueprint of their business model through which of the following Culture Voice memos structures, processes
Culture structures processes
A company's total return to shareholders consists of which of the following? (Check all that apply.) Wages Dividends received Stock price appreciation Capital depreciation
Dividends received Stock price appreciation*
Which of the following are true of a firms book value It's important has declined overtime It is calculated as cost of assets minus accumulated depreciation It captures the historical cost of a firms asset It's based on future valuation of a firm
It's important has declined overtime It is calculated as cost of assets minus accumulated depreciation It captures the historical cost of a firms asset
Which of the following would provide the best bench mark of a computer firms performance relative to other high tech firms The value of yen NASDAQ computer index S&P 500 Dow Jones Industrial Average
NASDAQ computer index
Which of the following statements about stock market valuation's are true Viewed over a long term stock market valuation is used for metric for assessing competitive advantage Stock market valuation is estimated increase in a stock value during the next fiscal year Investors generally take a poor view of stock market valuation because it includes all shares and its calculation Stock market valuation is equal to the number of outstanding shares multiplied by share price
Viewed over a long term stock market valuation is used for metric for assessing competitive advantage Stock market valuation is equal to the number of outstanding shares multiplied by share price
Which of the following are standard performance dimensions for a company? (Check all that apply.) Multiple select question. the fixed and variable costs a firm's accounting profitability 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
a firm's accounting profitability how much shareholder value a firm creates how much economic value a firm generates*
When competitive advantage is assessed from an analysis of publicly available data, a firm measures its ______. balanced scorecard accounting profitability triple bottom line economic value created
accounting profitability*
Which of the following are elements of the social dimension of the triple bottom line? (Check all that apply.) achieving work/life balance reducing overhead costs human sustainability improving recycling efforts
achieving work/life balance human sustainability*
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 greater of either lesser of either total sum of
difference between*
Which of the following dimensions make up the triple bottom line? (Check all that apply.) international ecological economic social
ecological economic social*
The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______. Multiple choice question. economic value created stock price appreciation a profit margin overhead derivative pricing
economic value created*
To measure firm-level competitive advantage, a company must ______. offer hundreds of products within individual strategic business units differentiate products in more diversified markets estimate the economic value created for all products and services offered by the firm diversify conglomerate offerings and assessment
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 employ the use of estimates in firm-level strategic management recall the fixed and variable costs to measure competitive advantage identify some of the most commonly used profitability metrics in strategic management
examine consumers' purchasing habits for their revealed preferences*
The legal owners of publicly traded companies are called ______. executives business holders shareholders stock brokers
shareholders
The most a consumer is willing to pay for a product is equivalent to the product's ______. total perceived consumer benefits economic value created price relative to all costs, including overhead traceable asset value on the stock exchange
total perceived consumer benefits*
Investors in a company are mostly concerned about the company's ______. return on invested assets planned emergence total return to shareholders opportunity cost
total return to shareholders*
Which of the following statements about creating and implementing an affective business model are true Firms that wish to truly innovate and original must avoid using a blueprint which might be limiting Firms must use a blueprint to come up with strategies for how the firm will compete in the market Firms must transform their competitive strategy into a blueprint of incentives and actions that support their goals Firms must implement their competitive strategy blueprints the processes procedures cultures and structure
Firms much transform their competitive strategy into a blueprint of incentives and actions that support their goals Firms must implement their competitive strategy blueprints the processes procedures cultures and structure
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 ______. strategic emergence the accounting metric framework the balanced scorecard shareholder analysis
the balanced scorecard*
