Chapter 9

Question 1

What is ‘corporate strategy’?

Answer 1

It decribes a company’s term

1. future vision
2. Its purpose
3. It outlines the company’s target customers
4. Product/Service it offers

Question 2

How can a company provide better value than its competitors?

Answer 2

1) Product Differentiation
2) Cost Leader
3) Customer service

Question 3

What is ‘product differentiation’?

Answer 3

Its when te company offers better product and or services, however these are priced much higher

Question 4

What is ‘cost leader’?

Answer 4

It means when a company offers better prices than its competitors usually at a lower price

Question 5

What is ‘customer experience’?

Answer 5

When a company offers better customer service than its compeititors

Question 6

Can a company adopt both a ‘product differentiation and a cost leader’

Answer 6

no

Question 7

What is a company that has excellent customer service + product differentiation?

Answer 7

Apple

Question 8

What is a company that is a cost leader?

Answer 8

Walmart

Question 9

What is a ‘performance management system’?

Answer 9

It’s a system that monitors and measures a company’s OVERALL Performance

Question 10

What are key performance indicators

Answer 10

These are both ‘financial and non-financial’ measures that are important to assess when looking at a company’s performance

Question 11

Ex of a ‘financial KPI”

Answer 11

Gross margin %

Question 12

Ex of a nonfinancial KPI

Answer 12

Customer satisfaction

Question 13

What are the goals and objectives?

Answer 13

Its what a companies targets the KPI to be over a short or long term period

Question 14

What is ‘measuring and monitoring performance’?

Answer 14

It is the concept of comparing KPIS to the actual results of KPIs

Question 15

What are employee rewards systems?

Answer 15

It is a program in a company used to motivate employees to achieve company targets

Question 16

What is a ‘modified balanced scorecard’?

Answer 16

Its a tool used to understand a company’s performance from the following 5 perspectives

Question 17

What are the 5 perspectives

Answer 17

financial, customer, environmental, internal business processes, and learning & growth (including social).

Question 18

What does the ‘finacial perspective mean?’

Answer 18

It measues and monitor a companies performance from a financial perspective

Question 19

What does the ‘customer perspective mean?’

Answer 19

Measures and monitors performance from a customer perspective

Question 20

What does the ‘environmental perspective mean?’

Answer 20

Measures and monitors performance from an environmental perspective (if a company is being eco friendly)

Question 21

What does the ‘learning + growth perspective mean?’

Answer 21

Measures and monitors a company’s performance from an employee perspective (how happy are our employees)

Question 22

What does the ‘internal business process perspective mean?’

Answer 22

Measures and monitors a company’s performance from an efficiency perspective on its internal operations

Question 23

Does a company have one overall balanced scorecard?

Answer 23

NOOOO

Question 24

What are ‘responsibility centers’?

Answer 24

Are segments within a company that are expected to manage

1. Revenue
2. Costs
3. Investments
4. Profits

Question 25

What is a revenue centre

Answer 25

When a team can only influence and control revenue

Question 26

What is a cost center

Answer 26

When a team can only influence and control the cost

Question 27

What is a profit center

Answer 27

Can influence and control both revenue and cots but cannot make investment decisions

Question 28

What is an investment center

Answer 28

Can control and influence revenue and costs an can make investment decisions

Question 29

What is a management reporting cycle?

Answer 29

It’s a process that involves
1. setting budgets
2. producing management reports, 3. making decisions to improve performance
4. and help motivate employees

Question 30

What do we do when we ‘assess financial performance?

Answer 30

We do a variance analysis that comapres budgeted results to our income statement

Question 31

In terms of variances, revenue, contribution margin, gross margin, operating income, and net income variances are favorable when?

Answer 31

Actual results are greater than the budgeted

Question 32

An expense variance is favorable when

Answer 32

Actual is less than budgeted