Chapter 9 Flashcards
What is ‘corporate strategy’?
It decribes a company’s term
- future vision
- Its purpose
- It outlines the company’s target customers
- Product/Service it offers
How can a company provide better value than its competitors?
1) Product Differentiation
2) Cost Leader
3) Customer service
What is ‘product differentiation’?
Its when te company offers better product and or services, however these are priced much higher
What is ‘cost leader’?
It means when a company offers better prices than its competitors usually at a lower price
What is ‘customer experience’?
When a company offers better customer service than its compeititors
Can a company adopt both a ‘product differentiation and a cost leader’
no
What is a company that has excellent customer service + product differentiation?
Apple
What is a company that is a cost leader?
Walmart
What is a ‘performance management system’?
It’s a system that monitors and measures a company’s OVERALL Performance
What are key performance indicators
These are both ‘financial and non-financial’ measures that are important to assess when looking at a company’s performance
Ex of a ‘financial KPI”
Gross margin %
Ex of a nonfinancial KPI
Customer satisfaction
What are the goals and objectives?
Its what a companies targets the KPI to be over a short or long term period
What is ‘measuring and monitoring performance’?
It is the concept of comparing KPIS to the actual results of KPIs
What are employee rewards systems?
It is a program in a company used to motivate employees to achieve company targets
What is a ‘modified balanced scorecard’?
Its a tool used to understand a company’s performance from the following 5 perspectives
What are the 5 perspectives
financial, customer, environmental, internal business processes, and learning & growth (including social).
What does the ‘finacial perspective mean?’
It measues and monitor a companies performance from a financial perspective
What does the ‘customer perspective mean?’
Measures and monitors performance from a customer perspective
What does the ‘environmental perspective mean?’
Measures and monitors performance from an environmental perspective (if a company is being eco friendly)
What does the ‘learning + growth perspective mean?’
Measures and monitors a company’s performance from an employee perspective (how happy are our employees)
What does the ‘internal business process perspective mean?’
Measures and monitors a company’s performance from an efficiency perspective on its internal operations
Does a company have one overall balanced scorecard?
NOOOO
What are ‘responsibility centers’?
Are segments within a company that are expected to manage
- Revenue
- Costs
- Investments
- Profits
What is a revenue centre
When a team can only influence and control revenue
What is a cost center
When a team can only influence and control the cost
What is a profit center
Can influence and control both revenue and cots but cannot make investment decisions
What is an investment center
Can control and influence revenue and costs an can make investment decisions
What is a management reporting cycle?
It’s a process that involves
1. setting budgets
2. producing management reports, 3. making decisions to improve performance
4. and help motivate employees
What do we do when we ‘assess financial performance?
We do a variance analysis that comapres budgeted results to our income statement
In terms of variances, revenue, contribution margin, gross margin, operating income, and net income variances are favorable when?
Actual results are greater than the budgeted
An expense variance is favorable when
Actual is less than budgeted
