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MA introduction + lecture 1 Flashcards

tenta (22 cards)

1
Q

What is strategy in a business context?

A

The plan that determines the purpose and long term direction of the company.

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2
Q

What are the two main competitive strategies firms can adopt?

A
  • Product differentiation
  • Cost leadership
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3
Q

What does product differentiation lead to?

A

Brand loyalty and the willingness of customers to pay high prices.

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4
Q

What is cost leadership?

A

A strategy that leads to lower selling prices.

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5
Q

Which company exemplifies a cost leadership strategy?

A

Walmart

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6
Q

Which company exemplifies a product differentiation strategy?

A

Samsung

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7
Q

What is a cost object?

A

The things we want to know the cost of, e.g., an e-bike.

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8
Q

Define direct costs.

A

Costs that can be easily traced to cost objects, e.g., bike material.

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9
Q

What are overhead costs?

A

Indirect costs that can’t be traced, but need to be allocated through a cost driver.

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10
Q

What are the six levels in the organizational chart of Daimler?

A
  • Level 1: CEO
  • Level 2: Corporate support functions
  • Level 3: Product lines
  • Level 4: CARS support functions
  • Level 5: PRODUCTION locations
  • Level 6: SINDELFINGEN models
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11
Q

What does cost behavior refer to?

A

The relationship between production volume and costs.

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12
Q

What are variable costs?

A

Costs that increase with the number of units produced.

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13
Q

What are fixed costs?

A

Costs that do not change with the number of units produced.
In the longterm it behaves like a stepfunction.

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14
Q

What are learning curves?

A

Representations of how employees become more efficient in production over time.

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15
Q

What is the normal activity level?

A

The steady, most efficient level of production for an employee.

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16
Q

What are diseconomies of scale?

A

Inefficiencies that occur when production reaches its peak, causing hindrances.

17
Q

What does total cost represent on a graph?

A

The cost associated with producing a certain number of units.

18
Q

What are product costs?

A

All costs necessary to complete the production process of a product. /Costs incurred in the manufacturing of a product

19
Q

What are period costs?

A

All other costs, including selling expenses and administrative expenses.

20
Q

What is work in process inventory?

A

Collection of raw material, labor costs, and overhead costs for products in production.

21
Q

Where is the cost of goods sold reported?

A

In the income statement.

22
Q

Fill in the blank: Fixed costs behave like _______ over the long term.

A

step-functions