Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

2022 - BAG > 1-2) Introduction & Strategic Analysis > Flashcards

1-2) Introduction & Strategic Analysis Flashcards

1
Q

how to calculate EVA?

A

economic value added
= OP after tax less cost of financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what does it mean if the EVA is negative?

A

value has been destroyed this year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what are the roles of a financial manager?

A
  • pursuing wealth-creating investment opportunities
  • finding funds to finance investments
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is diversification?

A

when a company expands its investment portfolio to spread the risk of the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what are capital markets used for?

A

obtaining long-term financing instruments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are money markets used for?

A

obtaining short-term financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

how do we calculate the required rate of return?

A

risk-free rate + risk premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

when does arbitrage occur?

A

when we buy and sell the same good in different markets to take advantage of the price difference

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what does portfolio theory state?

A

that risk can be reduced by combining assets into portfolios of shares in different economic sectors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is a PESTEL analysis used for?

A

used to consider various factors that will have a material impact on a company’s operations and level of profitability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what does a business use to strategy for?

A
  • to achieve its objectives
  • to look at which actions need to be taken to achieve objectives
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is the business’s vision?

A

where they want to go / what they want to become

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is the business’s mission?

A

what is it’s purpose

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

which product strategies can a company use to improve their competitive advantage?

A
  • cost leadership
  • differentiation
  • focus / segmentation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what does cost leadership mean?

A

having a lower cost position than competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what does cost leadership require?

A

usually requires economies of scale and efficient operations; low margin, high volumes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what does differentiation mean?

A
  • fulfilling niche needs
  • creating a powerful brand/image/product that allows company to sell goods at a premium
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what does differentiation require?

A

high margins, lower volume

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what does segmentation do?

A

finding a segment of the market which is untapped by larger firms. usually scale leaders in their own market and have strong influence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what do we use Porter’s 5 forces for?

A

helps to analyze the level of competition within an industry

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what are the 5 components of Porter?

A
  • threat of new entrants
  • threat of substitutes
  • rivalry among competitors
  • bargaining power of suppliers
  • bargaining power of customers
22
Q

what is profit pool analysis?

A

analyzing an industry for a period

23
Q

what measures do we use in a GE-McKinsey matrix?

A
  • industry attractiveness
  • competitive strength of the business unit
24
Q

how do we measure industry attractiveness?

A
  • industry growth
  • market size
  • competition
  • global expansion
25
Q

how do we measure business unit performance relative to the industry?

A
  • brand
  • market share
  • growth rate
  • distribution channels
26
Q

what are the company’s resources?

A

assets controlled by the firm

27
Q

what are the company’s capabilities?

A

firm’s ability to exploit its assets (what it does well)

28
Q

what are the company’s core competencies?

A

what distinguishes the firm from its competitors (what is strategically valuable)

29
Q

what should we focus on when developing strategy?

A

a company’s core competencies

30
Q

what can help a company identify its core competencies?

A

the VRIO framework

31
Q

what does VRIO stand for?

A
  • value = what competitive adv does it give
  • rarity = do others possess it
  • imitability
  • organization = is the company organized to exploit the competency
32
Q

what does the customer value proposition do?

A

tells prospects why they should do business with you and not competitors; makes the benefits we offer clear from the outset

33
Q

what are the 4 C’s?

A
  • costs
  • customers
  • competitors
  • capabilities
34
Q

what is the purpose of the 4 C’s?

A

to analyze the company specifically and its environment it operates in, to provide insight and guide decisions

35
Q

what is customer segmentation used for?

A

understanding who their customer is and why they are their customer

36
Q

what can a company base their customer decision on?

A
  • demographic (age, gender, income)
  • geographic
  • lifestyle (interests, activities, opinions)
  • behavioral
  • benefit
  • life stage
37
Q

which methods are useful for perspective and execution?

A
  • Ansoff matrix
  • BCG matrix
  • product life cycle
38
Q

what does the Ansoff matrix assist with?

A

it is a market planning model; helps a business determine its product and market growth strategy

39
Q

what is the market penetration strategy?

A

increasing sales of an existing product in an existing market

40
Q

what is the product development strategy?

A

introducing new product, existing market

41
Q

what is the market development strategy?

A

entering a new market with existing products

42
Q

what is the diversification strategy?

A

new product, new market

43
Q

what is a synergy?

A

the ability of two companies to create more value together than they could on their own

44
Q

what is the BCG matrix used for?

A

helps with long-term strategic planning and considering growth opportunities by helping a company decide which products to invest in by reviewing its current portfolio

45
Q

what are the four components of the BCG matrix?

A
  • question marks
  • stars
  • dogs
  • cash cows
46
Q

what is the question mark?

A
  • low market share, high market growth
  • do not know what to do with the opportunity, must decide whether to increase their investment
47
Q

what is the star?

A
  • high market share, high market growth
  • doing well, lots of opportunities
48
Q

what is the dog?

A
  • low market share, low market growth
  • weak in market, hard to make profit
49
Q

what is the cash cow?

A
  • high market share, low market growth
  • doing well in growth but limited opportunities
50
Q

what are the 5 stages of the product cycle?

A

1) introduction / start-up
2) growth
3) shakeout
4) maturity
5) decline

51
Q

what is the product cycle used for?

A

determining strategy for products such as inc advertising, reduce prices, expand into new markets

52
Q

how can product cycle overlap with BCG?

A

1) introduction = ?
2) growth = star
3) maturity = cash cow
4) decline = dog

2022 - BAG (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions