Michael Porter draws a firm distinction between operational effectiveness and a strategy. Briefly describe this distinction, and identify when a company can claim that it has a strategy
What will be an ideal response?
Competitors can quickly copy the operationally effective company using benchmarking and other tools, thus diminishing the advantage of operational effectiveness. Porter defines strategy as "the creation of a unique and valuable position involving a different set of activities." A company can claim that it has a strategy when its activities differ from those of its rivals or performs similar activities in different ways.
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Net sales revenue is calculated by ________.
A) subtracting cost of goods sold from sales revenue B) subtracting sales discounts and selling expenses from sales revenue C) adding sales discounts and sales returns and allowances to sales revenue D) subtracting sales discounts and estimated sales returns and allowances from sales revenue
A _____ is a basic statistical tool that graphically shows the frequency or number of observations of a particular value or within a specified group
A) flowchart B) histogram C) cause-and-effect diagram D) scatter diagram
As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and gL = 8.00% (constant). Based on the dividend growth model, what is the cost of common from reinvested earnings?
A. 10.69% B. 11.25% C. 11.84% D. 12.43% E. 13.05%
You find that a firm that uses debt has a compound leverage factor less than 1. This tells you that ________.
A. the firm's use of financial leverage is positively contributing to ROE B. the firm's use of financial leverage is negatively contributing to ROE C. the firm's use of operating leverage is positively contributing to ROE D. the firm's use of operating leverage is negatively contributing to ROE