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

Manufacturers of electric fragrance diffusers sell the electric outer device at an extremely low price, sometimes even at a loss.However, they make their money on the product by charging a premium on the perfume refills that have to be replaced regularly.Which of the following business models does this best illustrate?

What do higher ratios of receivables turnover indicate?

Samantha is a recent fashion graduate.She started her own apparel store with an investment of $300,000.In the first year she made a profit of $60,000.If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year.Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000.Thus, the amount $62,000 ($50,000 + $12,000)would be Samantha's _____.

Explain how business models put strategy into action.

Using the _____ approach, managers audit their company's fulfillment of its social and ecological obligations to stakeholders such as employees, customers, suppliers, and communities as conscientiously as they track its financial performance.