Question 1

Which of the following statements is true of the triple-bottom-line?

Accepted Answer

A)   It is more or less a one-dimensional metric of measuring competitive advantage of a firm.
B)   Its primary focus is to base a firm's strategic goals entirely on external performance dimensions.
C)   According to this approach, achieving positive results in any one of the dimensions, economic, social, and ecological, can lead to a sustainable strategy.
D)   Three dimensions, economic, social, and ecological, make up the triple-bottom-line.E) C) and D)
F) B) and C)

Question 2

If a firm's market capitalization is $1 billion and the share price is $50,how many shares outstanding does the firm have?

Accepted Answer

A)   20 thousand
B)   20 million
C)   500 thousand
D)   50 millionE) B) and C)
F) A) and D)

Question 3

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.E) A) and B)
F) A) and C)

Question 4

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 shareE) C) and D)
F) A) and D)

Question 5

In the _____ business model,the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

Accepted Answer

A)   subscription-based
B)   razor-razor-blade
C)   pay-as-you-go
D)   direct salesE) B) and D)
F) A) and D)

Question 6

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However,users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Accepted Answer

A)   freemium
B)   subscription-based
C)   pay-as-you-go
D)   razor-razor-bladeE) B) and C)
F) C) and D)

Question 7

The market capitalization of a public company is $5 billion.Each share of the company is traded at $200.What do you infer from this financial data?

Accepted Answer

A)   The firm's number of outstanding shares is 25 million.
B)   The firm pays an annual dividend of 10 percent.
C)   The firm's total return to shareholder is $5 billion.
D)   The firm's economic value created is $5 billion.E) A) and B)
F) B) and C)

Question 8

A firm has 30 million shares outstanding,and each share is traded at $100.Also,each shareholder gets a dividend of $2,000 annually.In this case,the market capitalization is

Accepted Answer

A)   30,000 shares, that is, 30 million shares/$100.
B)   $200,000, that is, $2,000 × $100.
C)   $3 billion, that is, 30 million shares × $100.
D)   20:1, that is, $2,000/$100.E) B) and C)
F) B) and D)

Question 9

How is the triple-bottom-line approach different from the traditional approaches to measuring competitive advantage?

Accepted Answer

A)   The triple-bottom-line takes a more integrative and holistic view in assessing a company's performance than traditional approaches do.
B)   The triple-bottom-line places less emphasis on financial success in assessing a company's performance than traditional approaches do.
C)   The triple-bottom-line uses a more one-dimensional approach in assessing a company's performance than traditional approaches do.
D)   The triple-bottom-line relies more on internal factors in assessing a company's performance than traditional approaches do.E) B) and D)
F) A) and B)

Question 10

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Accepted Answer

A)   land and building
B)   accounts payable
C)   patents
D)   customer experienceE) None of the above
F) B) and C)

Question 11

Which of the following is an external performance metric?

Accepted Answer

A)   return on revenue
B)   fixed assets turnover
C)   inventory turnover
D)   total return to shareholdersE) A) and D)
F) B) and C)

Question 12

Osion Electronics Inc.incurs a cost of $350 to produce one unit of a cell phone.The company's management has priced the product at $600 in the market.Considering the technological advancement of the cell phone,customers perceive its value to be around $800.What is the economic value created in this scenario?

Accepted Answer

A)   $350
B)   $450
C)   $800
D)   $200E) None of the above
F) All of the above

Question 13

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.E) All of the above
F) A) and C)

Question 14

Photohome 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-bladeE) B) and C)
F) None of the above

Question 15

Apple Watch retailed for $349 in 2015,and the firm was predicted to sell millions of units.The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84.Thus,Apple's profit for each watch sold is an estimated $265,with a profit margin of _____ percent.

Accepted Answer

A)   215
B)   265
C)   315
D)   365E) B) and D)
F) None of the above

Question 16

Which of the following is not an accurate expression of the economic value created per unit of a product sold?

Accepted Answer

A)   the sum of consumer surplus and producer surplus
B)   the difference between consumer's reservation price and firm's cost
C)   the sum of consumer surplus and firm profit
D)   the difference between the price charged and the firm's costE) A) and D)
F) B) and D)

Question 17

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.E) B) and D)
F) A) and D)

Question 18

Value is determined by the perceived benefits a good or service provides to a(n)

Accepted Answer

A)   manufacturer.
B)   buyer.
C)   investor.
D)   retailer.E) C) and D)
F) B) and C)

Question 19

By selling a laptop at $1,000 for which consumers are willing to pay up to $1,200,a consumer electronics firm makes a profit of $400 per unit.In this scenario,the amount $600,that is ($1200 - $1000) + $400,is the

Accepted Answer

A)   opportunity cost.
B)   economic value created.
C)   reservation price.
D)   consumer surplus.E) C) and D)
F) All of the above

Question 20

Which of the following is a disadvantage of the balanced-scorecard approach?

Accepted Answer

A)   It fails to link the strategic vision to responsible parties within the organization.
B)   It fails to translate the vision into measureable operational goals.
C)   It provides limited guidance for designing and planning business processes.
D)   It provides limited guidance about which metrics to choose.E) None of the above
F) B) and D)

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

How does a sustainable strategy typically help a firm?

Correct Answer
verified

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However,users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is an external performance metric?

Correct Answer
verified

Which of the following statements is true of the triple-bottom-line?

Correct Answer
verified

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Correct Answer
verified

Photohome 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?

Correct Answer
verified

By selling a laptop at $1,000 for which consumers are willing to pay up to $1,200,a consumer electronics firm makes a profit of $400 per unit.In this scenario,the amount $600,that is ($1200 - $1000) + $400,is the

Correct Answer
verified

Value is determined by the perceived benefits a good or service provides to a(n)

Correct Answer
verified

A firm has 30 million shares outstanding,and each share is traded at $100.Also,each shareholder gets a dividend of $2,000 annually.In this case,the market capitalization is

Correct Answer
verified

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

Correct Answer
verified

The market capitalization of a public company is $5 billion.Each share of the company is traded at $200.What do you infer from this financial data?

Correct Answer
verified

How is the triple-bottom-line approach different from the traditional approaches to measuring competitive advantage?

Correct Answer
verified

If a firm's market capitalization is $1 billion and the share price is $50,how many shares outstanding does the firm have?

Correct Answer
verified

Which of the following is a disadvantage of the balanced-scorecard approach?

Correct Answer
verified

Apple Watch retailed for $349 in 2015,and the firm was predicted to sell millions of units.The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84.Thus,Apple's profit for each watch sold is an estimated $265,with a profit margin of _____ percent.

Correct Answer
verified

Correct Answer
verified

Which of the following is not an accurate expression of the economic value created per unit of a product sold?

Correct Answer
verified

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

Correct Answer
verified

In the _____ business model,the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

Correct Answer
verified

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

How does a sustainable strategy typically help a firm?

Correct AnswerverifiedShow Answer

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However,users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an external performance metric?

Correct AnswerverifiedShow Answer

Which of the following statements is true of the triple-bottom-line?

Correct AnswerverifiedShow Answer

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Correct AnswerverifiedShow Answer

Photohome 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?

Correct AnswerverifiedShow Answer

By selling a laptop at $1,000 for which consumers are willing to pay up to $1,200,a consumer electronics firm makes a profit of $400 per unit.In this scenario,the amount $600,that is ($1200 - $1000) + $400,is the

Correct AnswerverifiedShow Answer

Value is determined by the perceived benefits a good or service provides to a(n)

Correct AnswerverifiedShow Answer

A firm has 30 million shares outstanding,and each share is traded at $100.Also,each shareholder gets a dividend of $2,000 annually.In this case,the market capitalization is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The market capitalization of a public company is $5 billion.Each share of the company is traded at $200.What do you infer from this financial data?

Correct AnswerverifiedShow Answer

How is the triple-bottom-line approach different from the traditional approaches to measuring competitive advantage?

Correct AnswerverifiedShow Answer

If a firm's market capitalization is $1 billion and the share price is $50,how many shares outstanding does the firm have?

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of the balanced-scorecard approach?

Correct AnswerverifiedShow Answer

Apple Watch retailed for $349 in 2015,and the firm was predicted to sell millions of units.The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84.Thus,Apple's profit for each watch sold is an estimated $265,with a profit margin of _____ percent.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not an accurate expression of the economic value created per unit of a product sold?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the _____ business model,the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

Correct AnswerverifiedShow Answer

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