Exam 2 Flashcards
(40 cards)
- Sustainable strategy can be perused over time without detrimental effects and is defined along:
economic, social, ecological dimensions
- Two firms following a related linked and related constrained diversification strategies respectively differ in that
One will share fewer competencies and resources between its business
- Recycling waste into new products and reducing waste while reducing costs represents
the use of the triple bottom line
- Return on Revenue (ROR) indicates
how much of a firm’s sales is converted into profits
- The ratio of cost of goods sold/revenue indicates
how efficiently a company can produce a good
- The R&D/Revenue ratio indicates
how much of a firm’s sales is invested to conduct R&D
- SG&A/Revenue is an indicator of
A firms focus on marketing
- Measuring firm performance through total return to shareholder and firm market capitalization is problematic because
Stock prices are volatile, external factors create noise, it is difficult to assess performance in the short term
- The translation of strategy into action primarily takes place in a firm
business model
- When a company makes its money on the replacement part of consumable its using
razor-razor blades business model
- When a firm provides the basic features and then charges a premium its using
freemium business model.
- Firms can achieve economies of scale by
taking advantage of certain physical properties
- Some firms have failed at pursuing a blue ocean strategy because they were
unable to differentiate or establish cost-leadership
Complements add value to a product
by being consumed in tandem with the product
- A differentiation strategy allows firms
to increase perceived value for customers and charge premium prices
- Minimum efficient scale (MES) is the output range needed to
bring down the cost per unit as much as possible
- A 90% learning curve indicates
that per unit costs drops 10% every time output is doubled
- Marriott lowered is cost structure by sharing its production assets over several types of hotels implies
economies of scope
A blue ocean strategy fails because
it requires reconciliation of fundamentally different strategic positions
To develop architectural innovations firms, need to
reconfigure the components of technology
What best describes a difference between incremental innovation and radical innovation
incremental builds on established knowledge radical new knowledge
- When Toyota first introduces small low-cost fuel-efficient cars and increasingly moved into high end luxury cars:
it was following a disruptive innovation strategy
To introduce radical innovations, new entrants
do not need to have formal organizational structures
Which of the following statements best describe the industry life cycle
the framework does not explain everything about change in industries
