Question 1

Which of the following scenarios exemplifies a sustainable strategy under the triple bottom line approach?

Accepted Answer

A)  Rather than complying with the restrictive recycling laws in the United States, Impervious Plastics outsourced its manufacturing to a country that has fewer environmental restrictions. 
B)  Impervious Plastics developed a chemical additive that doubled the life of its plastics. The additive was currently legal, but environmental groups argued that it harmed the environment. 
C)  Impervious Plastics reformulated its products to eliminate chemicals that were widely used in the industry but were being investigated for their potential negative effects on the environment. 
D)  Impervious Plastics' nearest competitor increased the salaries of its production workers by 30 percent, but Impervious kept its wages the same to gain a cost advantage over its competitor. 
A)  Rather than complying with the restrictive recycling laws in the United States, Impervious Plastics outsourced its manufacturing to a country that has fewer environmental restrictions. 
B)  Impervious Plastics developed a chemical additive that doubled the life of its plastics. The additive was currently legal, but environmental groups argued that it harmed the environment. 
C)  Impervious Plastics reformulated its products to eliminate chemicals that were widely used in the industry but were being investigated for their potential negative effects on the environment. 
D)  Impervious Plastics' nearest competitor increased the salaries of its production workers by 30 percent, but Impervious kept its wages the same to gain a cost advantage over its competitor.

Question 2

Which of the following statements correctly compares Apple and Microsoft in 2016?

Accepted Answer

A)  Apple had a higher return on revenue than Microsoft. 
B)  Apple had a higher return on invested capital than Microsoft. 
C)  Microsoft had higher total sales than Apple. 
D)  Microsoft had a lower cost structure than Apple. 
A)  Apple had a higher return on revenue than Microsoft. 
B)  Apple had a higher return on invested capital than Microsoft. 
C)  Microsoft had higher total sales than Apple. 
D)  Microsoft had a lower cost structure than Apple.

Question 3

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?

Accepted Answer

A)  the economic value creation model 
B)  the accounting profitability model 
C)  the shareholder value creation model 
D)  the balanced-scorecard model 
A)  the economic value creation model 
B)  the accounting profitability model 
C)  the shareholder value creation model 
D)  the balanced-scorecard model

Question 4

Shark Fin Golf Club requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?

Accepted Answer

A)  razor-razor-blade 
B)  pay-as-you-go 
C)  subscription-based 
D)  freemium 
A)  razor-razor-blade 
B)  pay-as-you-go 
C)  subscription-based 
D)  freemium

Question 5

The difference between the price charged for a product and the cost to manufacture it is referred to as the

Accepted Answer

A)  consumer surplus. 
B)  break-even price. 
C)  producer surplus. 
D)  reservation price. 
A)  consumer surplus. 
B)  break-even price. 
C)  producer surplus. 
D)  reservation price.

Question 6

Cloudlink is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?

Accepted Answer

A)  subscription-based 
B)  freemium 
C)  pay-as-you-go 
D)  razor-razor-blade 
A)  subscription-based 
B)  freemium 
C)  pay-as-you-go 
D)  razor-razor-blade

Question 7

The translation of strategy into action primarily takes place in a firm's

Accepted Answer

A)  mission statement. 
B)  executive summary. 
C)  business model. 
D)  code of conduct. 
A)  mission statement. 
B)  executive summary. 
C)  business model. 
D)  code of conduct.

Question 8

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a ________ technique.

Accepted Answer

A)  offshoring 
B)  crowdsourcing 
C)  peer-to-peer 
D)  binge watching 
A)  offshoring 
B)  crowdsourcing 
C)  peer-to-peer 
D)  binge watching

Question 9

How does a firm capture its producer surplus for a good or service?

Accepted Answer

A)  as cost per unit sold 
B)  as profit per unit sold 
C)  as earnings per share 
D)  as market price per share 
A)  as cost per unit sold 
B)  as profit per unit sold 
C)  as earnings per share 
D)  as market price per share

Question 10

________ precisely indicates how much of a firm's sales is converted into profits.

Accepted Answer

A)  Break-even price 
B)  Working capital turnover 
C)  Return on revenue 
D)  Inventory turnover 
A)  Break-even price 
B)  Working capital turnover 
C)  Return on revenue 
D)  Inventory turnover

Question 11

When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million. Thus, this $200 million is referred to as SW International's

Accepted Answer

A)  producer surplus. 
B)  consumer surplus. 
C)  opportunity cost. 
D)  social cost. 
A)  producer surplus. 
B)  consumer surplus. 
C)  opportunity cost. 
D)  social cost.

Question 12

How does a sustainable strategy typically help a firm?

Accepted Answer

A)  It helps the firm focus solely on its financial goals. 
B)  It reduces the need for corporate social responsibility within the firm. 
C)  It facilitates the firm in effectively isolating its external stakeholders. 
D)  It helps the firm achieve positive results along the social and ecological dimensions. 
A)  It helps the firm focus solely on its financial goals. 
B)  It reduces the need for corporate social responsibility within the firm. 
C)  It facilitates the firm in effectively isolating its external stakeholders. 
D)  It helps the firm achieve positive results along the social and ecological dimensions.

Question 13

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Accepted Answer

A)  Total return to shareholders 
B)  Earnings per share 
C)  Receivables turnover 
D)  Dividend yield 
A)  Total return to shareholders 
B)  Earnings per share 
C)  Receivables turnover 
D)  Dividend yield

Question 14

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?

Accepted Answer

A)  the triple-bottom-line approach 
B)  the economic value creation framework 
C)  the accounting profitability approach 
D)  the balanced-scorecard 
A)  the triple-bottom-line approach 
B)  the economic value creation framework 
C)  the accounting profitability approach 
D)  the balanced-scorecard

Question 15

The ratio Cost of goods sold/Revenue indicates how efficiently a company can

Accepted Answer

A)  produce a good. 
B)  sell a good. 
C)  advertise a good. 
D)  design a good. 
A)  produce a good. 
B)  sell a good. 
C)  advertise a good. 
D)  design a good.

Question 16

Which of the following expressions accurately describes market cap?

Accepted Answer

A)  It is the product of the number of outstanding shares and the share price. 
B)  It is the difference between the book value and the market value of a firm's assets. 
C)  It is the ratio of a firm's equity finance and its debt finance. 
D)  It is the difference between a firm's account receivables and account payables. 
A)  It is the product of the number of outstanding shares and the share price. 
B)  It is the difference between the book value and the market value of a firm's assets. 
C)  It is the ratio of a firm's equity finance and its debt finance. 
D)  It is the difference between a firm's account receivables and account payables.

Question 17

________ are best described as the value of the best forgone alternative use of the resources employed.

Accepted Answer

A)  Variable costs 
B)  Opportunity costs 
C)  Social costs 
D)  Switching costs 
A)  Variable costs 
B)  Opportunity costs 
C)  Social costs 
D)  Switching costs

Question 18

Return on risk capital primarily includes

Accepted Answer

A)  stock price appreciation plus dividends received over a specific period. 
B)  consumer surplus plus firm profit. 
C)  account receivables plus account payables. 
D)  economic value created by a firm plus reservation price. 
A)  stock price appreciation plus dividends received over a specific period. 
B)  consumer surplus plus firm profit. 
C)  account receivables plus account payables. 
D)  economic value created by a firm plus reservation price.

Question 19

Erin is the manager of gardening supplies wholesaler SpringTime Inc. The company's vision is to become the leading supplier of gardening materials west of the Mississippi River. In assessing the firm's current state, Erin has determined that the firm could differentiate itself from competitors with an easy-to-use online ordering system and a two-day delivery guarantee. To accomplish this, Erin has determined that SpringTime must spend the next two quarters honing its capabilities for sourcing materials quickly and improving its web development competencies. According to the balanced scorecard approach, what is wrong with Erin's thinking?

Accepted Answer

A)  She has not considered the opportunity costs associated with launching an online ordering system. 
B)  She has not addressed the question of which core competencies the firm needs. 
C)  She has failed to account for external factors such as customer perceptions and shareholder perceptions. 
D)  She has not addressed the question of how SpringTime will create value. 
A)  She has not considered the opportunity costs associated with launching an online ordering system. 
B)  She has not addressed the question of which core competencies the firm needs. 
C)  She has failed to account for external factors such as customer perceptions and shareholder perceptions. 
D)  She has not addressed the question of how SpringTime will create value.

Question 20

List the dimensions on which a firm can create greater economic value.

Accepted Answer

A firm's advantage can be based on super

Which of the following scenarios exemplifies a sustainable strategy under the triple bottom line approach?

Which of the following statements correctly compares Apple and Microsoft in 2016?

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?

Shark Fin Golf Club requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?

The difference between the price charged for a product and the cost to manufacture it is referred to as the

Cloudlink is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?

The translation of strategy into action primarily takes place in a firm's

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a ________ technique.

How does a firm capture its producer surplus for a good or service?

________ precisely indicates how much of a firm's sales is converted into profits.

How does a sustainable strategy typically help a firm?

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?

The ratio Cost of goods sold/Revenue indicates how efficiently a company can

Which of the following expressions accurately describes market cap?

________ are best described as the value of the best forgone alternative use of the resources employed.

Return on risk capital primarily includes

List the dimensions on which a firm can create greater economic value.

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters

Exam 5: Competitive Advantage, Firm Performance, and Business Models

Which of the following scenarios exemplifies a sustainable strategy under the triple bottom line approach?

Which of the following statements correctly compares Apple and Microsoft in 2016?

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?

Shark Fin Golf Club requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?

The difference between the price charged for a product and the cost to manufacture it is referred to as the

Cloudlink is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?

The translation of strategy into action primarily takes place in a firm's

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a ________ technique.

How does a firm capture its producer surplus for a good or service?

________ precisely indicates how much of a firm's sales is converted into profits.

How does a sustainable strategy typically help a firm?

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?

The ratio Cost of goods sold/Revenue indicates how efficiently a company can

Which of the following expressions accurately describes market cap?

________ are best described as the value of the best forgone alternative use of the resources employed.

Return on risk capital primarily includes

List the dimensions on which a firm can create greater economic value.

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters