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

Best Fit Club,a chain of gyms and spas,requires its customers 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?

Andrew invested $200,000 in the shares of a company.At the end of a year,he had earned $7,000 as dividends on his shares along with a $1,000 appreciation in the overall value of his shares.However,if Andrew had invested the same amount on an asset,like gold,the appreciation in its value would have earned him $10,000 at the end of the year.In this scenario,which of the following is Andrew's opportunity cost?

A defining characteristic of the pay-as-you-go business model is that the

Which of the following ratios best expresses inventory turnover?

Taking advantage of the pricing flexibility inherent in the wholesale model,Amazon offered many books (especially e-books)below the cost that other retailers had to pay to publishers.By doing this,Amazon showed how business models can be affected through

Best Cut Inc.sells cutlery by having salespeople set up appointments with potential customers and give them a sales pitch for the product.When a salesperson sells cutlery,he or she gets a predetermined percentage commission.This type of business model is called

Triple-bottom-line is a combination of economic,social,and _____ concerns that can lead to a sustainable strategy.

Free Spirit Communications Inc.is a cellular service provider that charges its customers $1 for three hours of talk time.So,if a customer's talk time for a month is 60 hours,the company charges him or her $20 at the end of the month.Which of the following business models does this best illustrate?

Which of the following describes a peer-to-peer technique?

The working capital turnover of Tesva Systems Corp.is 6.0.What does this financial data suggest?

The translation of strategy into action takes place in the firm's _____,which details the firm's competitive tactics and initiatives.

The ratio of SG&A/Revenue is an indicator of a firm's focus on

_____ is the money shareholders provide in return for an equity share,which they cannot recover if the firm goes bankrupt.

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

GlobalCom Inc.is an Internet service provider.It provides a router free of charge when users sign up for a two-year wireless service plan.In this plan,users pay in advance irrespective of whether they use the Internet package during the two-year period or not.Which of the following business models does this scenario best illustrate?

The top management at Parallela Pharma Inc.,through rigorous testing,ensures that the company develops and sells drugs that are free of harmful side effects.Also,the company ensures that the chemical waste generated in the manufacturing process is kept to a bare minimum and is disposed of according to the regulations of the Environmental Protection Agency.The management assesses its overall performance based on these dimensions.Thus,the managers at Parallela Pharma are applying the _____ approach to measure firm performance.

Economic value creation is best expressed as

When using the balanced-scorecard approach to assess a firm's performance,which of the following is not a key question that managers need to answer?

Both Vibrant Phones Inc.and Oryxo Inc.incur a cost of $200 to manufacture a single unit of a cell phone.However,Vibrant Phones creates more economic value than Oryxo does.What does this imply?

Airbnb rents spaces that previously would have been unused to generate revenue,while also dramatically increasing the potential amount of accommodation space in the 191 countries.This business uses a _____ technique.