International Business Exam 1 Cedarville Questions with Complete Solutions

Strategy - ANSWER-the actions taken by managers to attain the goals of the firm Profitability - ANSWER-the rate of return the firm makes on its invested capital Profit growth - ANSWER-the percentage increase in net profits over time Value creation - ANSWER-the difference between V (the price that the firm can charge for that product given competitive pressures) and C (the cost of producing that product Differentiation and low cost - ANSWER-the 2 basic strategies for creating value reduce costs or add value and raise prices - ANSWER-2 ways to increase profitability sell more in existing markets or enter new markets - ANSWER-2 ways to increase profit growth profitability and profit growth - ANSWER-2 factors that determine enterprise valuation 1. R&D 2. Production 3. Marketing and sales 4. Customer service - ANSWER-4 primary value chain activities in order 1. Company infrastructure 2. Human resources 3. Information systems 4. Logistics - ANSWER-4 value chain support activities Organizational architecture - ANSWER-the totality of a firm's organization-formal organizational structure, control systems and incentives, organizational culture, processes, and people Organizational structure - ANSWER-the formal division of the organization into subunits OR the establishment of integrating mechanisms to coordinate the activities of subunits including cross functional teams Controls - ANSWER-the metrics used to measure the performance of subunits and make judgments about how well the subunits are run