Ch 5, Quiz 4

Question 1

List the three standard performance dimensions.

Answer 1

• Accounting Profitability
• Shareholder value
• Economic value

Question 2

Define accounting profitability

Answer 2

Analysis that uses accounting data to assess and evaluate competitive advantage.

Question 3

Define shareholder value

Answer 3

Focuses on the shareholders that are part of the company that assesses and evaluates a competitive advantage by trying to overcome shortcomings of backward-looking internal focus mostly on tangible assets inherent in accounting profitability.

Question 4

Define economic value

Answer 4

It is the difference between buyers’ willingness to pay for p/s and the firm’s total cost to produce it.

Question 5

Be able to explain exhibits 5.4 and 5.5 and exhibit 5.6 in terms of value price cost competitive advantage and economic value creation

Answer 5

When looking at the differences between firms A and B show the competitive advantage Firm B has. (economic value is more in company B than A).
5.5 shows that even if they are relatively similar they show an economic value competitive advantage (from their costs).
5.6
Looks at the Consumer Surplus to understand that there is a greater amount that it will cost to produce.

Question 6

What is the triple bottom line?

Answer 6

A different method to assess and evaluate c.a. which is a fundamental way to a sustainable strategy that looks into the three Ps (Profits-economic, People-social & Planet-ecological).

Question 7

What is a business model?

Answer 7

How the firm conducts business with buyers, suppliers, and partners to make money.

Question 8

List all the business models mentioned in chapter 5

Answer 8

• Razor-razor blades
• Subscription
• Pay-as-you-go
• Freemium
• Wholesale
• Agency
• Bundling

Question 9

Explain why business models must be dynamic in the 21st century.

Answer 9

Due to our evolving environment, it is important to make adjustments to maintain and ensure a competitive advantage.