International Business Exam 4 Questions with Complete Solutions 100% Pass

strategy - ANSWER-the actions that managers take to attain the goals of the firm profitability - ANSWER-the rate of return the firm makes on its invested capital; a ration or rate of return concept 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 costs of producing that product) Michael Porter's two basic strategies of value creation - ANSWER-differentiation and low cost low-cost strategy - ANSWER-a strategy that focuses primarily on lowering production costs differentiation strategy - ANSWER-a strategy that focuses primarily on increasing the attractiveness of a product Efficiency Frontier (or production possibilities frontier) - ANSWER-shows all of the different positions that a firm can adopt with regard to adding value to the product (V) and low cost) diminishing returns - ANSWER-when a firm already has significant value built into its product offering, increasing value by a small amount requires significant additional costs, and the firm has to give up a lot of value in its product offering to get additional cost reductions operations - ANSWER-a value chain composed of a series of distinct value creation activities, including production, marketing and sales, materials management, research and development, Human Resources, information systems, and the firm infrastructure primary activities - ANSWER-involves the design, creation, and delivery of the product; its marketing; and its support and after-sale service. Divided into research and development, production, marketing and sales, customer service support activities - ANSWER-provides the inputs that allow the primary activities to occur; divided into information systems, company infrastructure, logistics, human resources