Exam 18: Business Strategy, Performance Measurement, and the Balanced Scorecard

Performance measurement is an important pillar of an organization's management control system, and while these pillars are consistent, each business is likely to use different approaches for each one. Performance measurement is the fourth pillar and is an anchor in the process. Which of the following is representative of effective performance measurement in the setting of a college classroom?

As companies become established and wish to improve upon their operations, they will seek out tools to assist them. One tool, the balanced scorecard (BSC), is often used to summarize and evaluate both financial and nonfinancial information. Which of the following represents an appropriate usage of the data gathered from a BSC?

As companies become established and wish to improve upon their operations, they will seek out tools to assist them. One tool, the balanced scorecard (BSC), is often used to summarize and evaluate both financial and nonfinancial information. Which of the following represents an inappropriate usage of the data gathered from a BSC?

Carrie is currently a full-time employee at a law firm, and she also makes and sells jewelry online in her personal time. She is trying to evaluate her side business in terms of financial measures. The online shop has generated the following numbers on average per month: Sales, $4,316.00; Variable Costs, $1,809.00; and Fixed Costs, $762.00. Carrie sold 1,144 units per month. What is Carrie's annualized operating income if Carrie sold 1,200 units per month instead of her current monthly average? (Round intermediate calculations to two decimal places.)

According to Porter, there are five forces that must be assessed and acknowledged by any business who wishes to successfully create an effective strategy. Which of the following best demonstrates the threat of substitutes for a handmade furniture manufacturer?

Companies will investigate and integrate tools to effectively evaluate themselves from both a financial and nonfinancial perspective. Both perspectives come with advantages and can assist in painting a more complete picture of how a business has performed. Why would a company choose to look at a nonfinancial measure?

A football team knows that to accomplish their goals, those goals need to range from high-level organizational thinking to each individual player. The team has the following levels: franchise, team, and individual. What is an objective that would likely appear at the franchise level?

Brian and Mark are in the early stages of planning for a café they would like to open. Brian has a strong business background and currently works as a staff accountant at the corporate office for a local restaurant chain. Mark has been the store manager for a small bakery for the past few years where he was started as a barista. The two of them believe that combining their complementary skill sets will provide them the best opportunity to succeed in the café industry. Their café will feature unique roasts of coffee and espresso sourced from a local coffee bean roastery. They would also like to bake gluten-free and vegan desserts to sell to their customers. Brian and Mark intend to market their offerings as a premium choice and are aware that the pricing will not appeal to all, especially those strictly seeking the cheapest option. They would also like the café to offer space for small community events and in-house events like trivia, book signings, or open mic nights. They have scouted locations and believe they will take over another café's lease since the current renters have chosen to close their shop after eleven years. The neighborhood where the building is located also features trendy shops, dog parks, bookstores, and local restaurants. Brian and Mark have tentatively decided to name their café Java City and would like to open within the next 9 months if possible. a. Are Brian and Mark using a cost leadership or product differentiation, and why? b. What is an appropriate strategic plan the company should set for themselves, and what is an appropriate way to measure their performance? c. Identify a factor for each of Porter's Five Forces that could impact the strategy for the company. d. If the company also decides to perform a SWOT Analysis, then what are the internal strengths and weaknesses and external opportunities and threats the company could encounter? e. If you needed to make a recommendation to management based on your analysis in parts a, b, c, and d, what would you select? Please provide as much detail as possible to support your decision.

The owner of a local pet supply store fears their efforts to increase the store's gross profit and net income are futile. They compiled the following information from their financial statements over the last 2 years: Using horizontal analysis, what is the percent change in the Profit Margin ratio for year 2 compared to year 1? (Round profit margin ratios for years 1 and 2 to two decimal places.)

The owner of a local pet supply store fears their efforts to increase the store's gross profit and net income are futile. They have compiled the following information from their financial statements over the last 2 years: What is the percent difference in the Gross Margin ratio for year 2 compared to year 1? (Round the gross margin for years 1 and 2 to two decimal places.)

Trevor sculpts unique vases for houseplant when he is not working as a full-time vet technician at a small, family practice. Trevor's side business has grown exponentially, and he would like to hire someone to help manage the online ordering system and pack orders for shipment. Currently, the monthly costs of his business include: Variable Costs of $10.00 per unit and fixed costs of $773.00. Trevor wants to make an annual operating income of $37,823 at a sales price of $18.00 per unit. How many of these units would Trevor have to sale working on his own? Round final answer to the nearest whole unit.

In addition to Porter's Five Forces and related strategy spectrum, a company could choose to use the complementary framework of customer value proposition. This method requires that each company make a choice between operational excellence and product leadership. Which of the following represents the mix of items that a company should detail under the framework of customer value proposition?

Lana is the owner of Leafy Greens, a meal-replacement smoothie store slated to open within the next six months. Lana is in the process of creating her strategic plan and needs to identify her furthest-reaching goals. She knows that this process will take some time to get right and wants to do it properly. Which of the following is an example of a threat of substitutes for Leafy Greens according to Porter's Five Forces?

After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who has selected a cost leadership strategy?

Happy Occasions is a small florist slated to open later this year. In preparation for the business launch, the owner is evaluating strategies to optimize their potential for success. If the owner wishes to focus on maximizing the number of new customers, then what would an appropriate customer perspective initiative be?

Cameron would like to improve the overall performance for the factory where he works. He has decided to use a balanced scorecard (BSC) so he can take both financial and nonfinancial performance into consideration. Which of the following would be an appropriate objective to implement from the customer perspective?

When a company is in its planning stage, it must analyze the existing market to plan its path to success. According to Porter, there are five forces that shape the industry a business operates within. Which of the following is one of those five forces?

When an organization starts up, they decide on their mission and vision, and these two components inform every step of their goal achievement. Which of the following best represents the component that determines the path they take to move towards implementing their long-term vision?

What is the overall goal of a business organization? What are Porter's Five Forces? How can these help a business achieve its overall goal?

The management team for an Italian restaurant has started its annual review of the overall performance of the organization. In an effort to include both financial and nonfinancial measures, they will complete a balanced scorecard (BSC). If they are focusing on the internal business process perspective, then which of the following would be an appropriate initiative and measure to decrease time from order placement to meal service?