Strategic Management Chapter 5

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

False

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

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

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

They can be individuals or organizations.

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

Public companies are required by law to release detailed accounting data, which enables ______.

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.

difference between

The balanced scorecard approach helps managers balance ______ goals.

financial and strategic

Which of the following statements are true about the rival businesses Apple and Microsoft? (Check all that apply.)

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

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.

Which of the following statements are true concerning a firm's business model? (Check all that apply.)

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

Which of the following correctly describe the information used for comparing the performance of public companies based on accounting profitability? (Check all that apply.)

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

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

The balanced scorecard framework draws from which of the following?

from multiple internal and external performance metrics

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

- social - ecological - economic

Which of the following are standard performance dimensions for a company? (Check all that apply.)

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

Managers implement the blueprint of their business model through which of the following? (Check all that apply.)

- processes - structures - culture

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

- qualitative - quantitative

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.

The firm's accounting profitability, ability to create shareholder value, and ability to generate economic value tend to be ______.

correlated

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

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

own at least one share of the company's stock

Which of the following are elements of the social dimension of the triple bottom line? (Check all that apply.)

- achieving work/life balance - human sustainability

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.)

- razor--razor-blade - subscription

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

When implementing the razor-razorblade strategy, companies make their profit from ______.

complementary goods

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

accounting profitability