Chapter 4 Flashcards
(44 cards)
Activity Ratio
measures how effectively a firm is usings its resources; inventory turnover, fixed assets turnover, total assets turnover, accounts receivable turnover, average collection period
Benchmarking
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.
Breakeven (BE) Point
the quantity of units that a firm must sell in order for its total revenues to equal its total costs.
Capital Budgeting
a.k.a investment decision is the allocation and reallocation of capital and resources to projects, products, assets, and division of an organization.
Communication
a major component in motivtion; it determines whether strategies can be implemented successfully
Controlling
includes all of those activities undertaken to ensure that actual operations conform to planned operations
Core Competence
a value chain activity that a firm performs especially well.
Cost/Benefit Analysis
assessing the costs, benefits, and risks associated with the marketing decisions.
Cultural Products
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.
Customer Analysis
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.
Data
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.
Distinctive Competencies
a firms strenght that cannot be easily matched or imitated by competitors.
Distribution
includes warehousing, distribution channels, distribution coverage, retail site locations, sales terriroties, inventory levels and location, transporation carriers, wholesaling and retailing
Divided Decisions
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.
Emperircal Indicators
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.
Financial Ratio Analysis
exemplifies the complexity of relationships among the functional areas of business.
Fixed Cost
business cost such as rent, that are constant whatever the quanity of the goods or services produced. Ex. plant, equimpment, stores, advertising, and land.
Financing Decison
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.
Functions of Finance/Accounting
comprise three decisions: the investment decision, the financing decison, and the dividend decision.
Functions of Management
consist of five basic acitivities: planning, organizaing, motivating, staffing, and controlling.
Functions of Marketing
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
Growth Ratios
measure the firms ability to maintain its economic position in the growth of the economy and industry.
Organizing
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.
Production/Operations Function
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.