Chapter 4 Flashcards

(44 cards)

1
Q

Activity Ratio

A

measures how effectively a firm is usings its resources; inventory turnover, fixed assets turnover, total assets turnover, accounts receivable turnover, average collection period

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2
Q

Benchmarking

A

an analytical tool used to determine whether a firm’s value chain activities are competitive compared to rivals and thus conducive to winning in the marketplace. It entails measuring costs of value chain activities across an industry to determine “best practices” among competing firms for the purpose of duplicating or improving upon these best practices. It enables a firm to take action to improve its competitiveness by identifying value chain activities where rival firms have comparative advantages in cost, service, reputation, or operation.

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3
Q

Breakeven (BE) Point

A

the quantity of units that a firm must sell in order for its total revenues to equal its total costs.

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4
Q

Capital Budgeting

A

a.k.a investment decision is the allocation and reallocation of capital and resources to projects, products, assets, and division of an organization.

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5
Q

Communication

A

a major component in motivtion; it determines whether strategies can be implemented successfully

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6
Q

Controlling

A

includes all of those activities undertaken to ensure that actual operations conform to planned operations

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7
Q

Core Competence

A

a value chain activity that a firm performs especially well.

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8
Q

Cost/Benefit Analysis

A

assessing the costs, benefits, and risks associated with the marketing decisions.

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9
Q

Cultural Products

A

includes values, beliefs, rites, rituals, ceremonies, myths, stories, legends, sagas, language, metaphors, symbols, heroes, and heroines. These products or dimensions are levers that strategists can use to influence and direct strategy formation implementation, and evaluation activities.

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10
Q

Customer Analysis

A

the examination and evaluation of consumer needs, desires, and wants– involves administering customer surveys, analyzing consumer information, evaluating market positioning strategies, developing customer profiles, and determining optimal market segmentation strategies.

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11
Q

Data

A

values of quantitative or qualitative variables, belonging to a set of items. Data are typically the result of measurements and can be visualized using graphs or images.

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12
Q

Distinctive Competencies

A

a firms strenght that cannot be easily matched or imitated by competitors.

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13
Q

Distribution

A

includes warehousing, distribution channels, distribution coverage, retail site locations, sales terriroties, inventory levels and location, transporation carriers, wholesaling and retailing

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14
Q

Divided Decisions

A

concern issues such as percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase or issuance of stock. It determines the amount of funds that are retained in a firm compared to the amount paid out to stockholders.

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15
Q

Emperircal Indicators

A

For a resource to be valuable, it must be either (1) rare, (2) hard to imitate, or (3) not easily substitutable. These three characteristics of resources enable a firm to implement strategies that improve efficiency and effectiveness and lead to a sustainable and strnger firms competitive advantage.

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16
Q

Financial Ratio Analysis

A

exemplifies the complexity of relationships among the functional areas of business.

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17
Q

Fixed Cost

A

business cost such as rent, that are constant whatever the quanity of the goods or services produced. Ex. plant, equimpment, stores, advertising, and land.

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18
Q

Financing Decison

A

determines the best capital structure for the firm and includes examining various methods by which the firm can rasie capital. Must be considered both short term and long term needs for working capital.

19
Q

Functions of Finance/Accounting

A

comprise three decisions: the investment decision, the financing decison, and the dividend decision.

20
Q

Functions of Management

A

consist of five basic acitivities: planning, organizaing, motivating, staffing, and controlling.

21
Q

Functions of Marketing

A

the process of defining, anticipating, creating, and fulfilling customers’ needs and wants for products and services. There are seven basic functions of marketing: customer analysis; selling products/services; product and service planning; pricing; distribution; marketing research; opportunity analysis

22
Q

Growth Ratios

A

measure the firms ability to maintain its economic position in the growth of the economy and industry.

23
Q

Organizing

A

the pursuing to achieve coordinated effort by defining task and authority relationships; determining who does what and who reports to whom. There are three sequential activities - work specialization (breaking down tasks into jobs), departmentalization (combining jobs to form departments), and delegating authority.

24
Q

Production/Operations Function

A

all of those activities that transform inputs into goods and services; prod/oper mgmt deals with inputs, transformations, and outputs across industries and markets. they often represent the largest part of an org’s human and capital assets. cross training can help their firms respond faster to changing markets. There are 5 basic functions/decisions within prod/ops : 1. process, 2. capacity, 3. inventory, 4. workforce, and 5. quality. there are 6 strategies on prod/ops that results in varying implications : 1. low cost provider, 2. a high quality provider, 3. great customer service provider, 4. first to introduce new product, 5. become highly automated, and 6. minimize layoffs.

25
Profitabilty Ratios
measure management's overall effectiveness as shown by the returns generated on sales and investment. examples include: gross profit margin, operating profit margin, net profit margin, return on assets (ROA), Return on Stockholder's Equity (ROE), Earnings per share (EPS), and price earnings ratio
26
Research & Development
this is the fifth major area of internal operations that should be examined for specific strengths and weaknesses. Many firms conduct no R&D, while other companies depend on successful R&D activites for survival. Firms invest in R&D because they believe that such an investment will lead to a superior product or service that will give them competitive advantages
27
Resource Based View
approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. Proponents of the RBV content that organizatonal performance will primarily be determined by internal resources that can be grouped into three all-encompassing categories: physical resources, human resources, and organizational resources
28
Selling
includes many marketing activities, such as advertising, sales, promotion, publicity, personal selling, sales force management, customer relations, and dealer relations. These activities are especially ciritical when a firm pursues a market penetration strategy
29
Staffing
also called personnel management or human resource management, includes activities such as recruiting, interviewing, testing, selecting, orienting, training, developing, caring for, evaluating, rewarding, disciplining, promoting, transferring, demoting, and dismissing employees, as well as managing union relations
30
Synergy
exists when everyone pulls together as a team that knows what it wats to achieve; can result in powerful competitive advantage
31
Test Marketing
one of the most effective product and service planning techniques. Allows an organization to test alternative marketing plans and to forecast future sales of new products. Also allows an organization to avoid substantial losses by revealing weak products and ineffective marketing approaches before large-scale production begins.
32
Value Chain Analysis
refers to the process whereby a firm determines that costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products. aims to identify where low-cost advantages or disadvantages exist anywhere along the value chain from raw material to customer service activities
33
Variable Costs
costs such as labor and materials. when increased. Raising VC is reflected by the VD line becoming steeper. When the total revenue line remains constant, the effect of increasing variable costs is to increase total costs, which increases the point at which total revenue = total costs = breakeven
34
Human resource management
• Includes activities such as recruiting, interviewing, testing, selecting, orienting, training, developing, caring for, evaluating, rewarding, disciplining, promoting, transferring, demoting, and dismissing employees, as well as managing union relations
35
Information
• Data becomes information only when it is evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time
36
Internal audit
* Requires gathering and assimilating information about the firm’s management, marketing, finance/accounting, production/operations, R&D, and management information systems operations * Provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization
37
Internal factor evaluation (IFE) matrix
• Strategy-formulation tool that summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas
38
Investment decision
* Also called capital budgeting | * Allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization
39
Leverage ratios
* Measure the extent to which a firm has been financed by debt * Include: debt to total assets ratio, debt to equity ratio, long term debt to equity ratio, times interest earned (or coverage) ratio
40
Liquidity ratios
* Measure a firm’s ability to meet maturing short term obligations * Include: current ratio and quick (or acid test) ratio
41
Management information systems
* Receives raw material from both the external and internal evaluation of an organization * Data is integrated in ways needed to support managerial decision making
42
Marketing research
* Systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services * Can uncover critical strengths and weaknesses
43
Motivating
* Can be defined as the process of influencing people to accomplish specific objectives * Explains why some people work hard and others do not * Motivating function of management includes 4 functions: leadership, group dynamics, communication, and organizational change
44
Organizational culture
* Defined as a pattern of behavior that has been developed by an organization as it learns to cope with its problem of external adaptation and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to think, perceive, and feel * Emphasizes the importance of matching external with internal factors in making strategic decisions