BUSI 400 CASE STUDY TESLA ASSIGNMENT
EXAM SCRIPT 2026 COMPLETE QUESTIONS
SOLUTIONS GRADED A+
◉ ● Research and Development
o Four approaches to determining R&D budget allocations Answer:
▪ (1) financing as many project proposals as possible
▪ (2) using a percentage of sales method
▪ (3) budgeting about the same amount that competitors spend for
R&D
▪ (4) deciding how many successful new products are needed and
working backward to estimate the required R&D investment
◉ o R&D can take two forms Answer: ▪ (1) internal R&D, in which
an organization operates its own department internally
▪ (2) contract R&D, in which a firm hires independent researchers
or independent agencies to help develop specific products.
◉ ● Benchmarking Answer: o An analytical tool used to determine
whether a firm's value chain activities are compared to rivals and
thus conducive to wining in the marketplace
,◉ ● The Internal Factor Evaluation Matrix (IFE) Answer: o This
strategy formulation tool summarizes and evaluates the major
strengths and weaknesses in the functional areas of a business
o Provides a basis for identifying and evaluating relationships
among those areas
◉ ● Long term objectives Answer: o Represent the results expected
from pursuing certain strategies
▪ Strategies represent the actions taken to accomplish long-term
objectives
▪ The time frame for objective and strategies is normally 2-5 years
◉ Nature of long term objectives Answer: ▪ Objectives should be
quantitative and measurable, realistic, and obtainable.
◉ ● Financial versus strategic Objectives Answer: o Financial
▪ Those associated with growth in revenues, growth in earnings,
higher dividends, larger profit margins, etc.
o Strategic
▪ Include: larger market share, quicker delivery, shorter time to
market, etc.
◉ ● Methods of not managing by objectives Answer: o Managing by
extrapolation
,▪ If it ain't broke don't fix it
o Managing by crisis
▪ A form of reacting rather than acting
▪ Allowing events to dictate what and when of management
situations
o Managing by subjectives
▪ There is really no method or general plan of how to do things
▪ Rather, the mentality of just do what you thing should be done - or
do your own thing the best way you know how
o Managing by hope
▪ Decisions are predicated on the hope that they will work and that
good times are just around the corner
◉ ● The Balanced Scorecard Approach Answer: o The need to
balance financial measures with nonfinancial measures
o This concept is consistent with the continuous improvement and
total quality management approach
◉ ▪ Forward integration Answer: ● Involves gaining ownership or
increased control over distributors or retailers.
o Example: manufacturers creating a website to sell direct to
consumers
o Effective method: franchising
● Especially effective when:
, o Organizations present distributors are especially expensive,
unreliable, or incapable or meeting distribution needs
o When the availability of quality distributors is so limited as to offer
a competitive advantage to those firms that integrate forward
o When an organization competes in an industry that is growing and
is expected to continue to grow rapidly
o When an organization has both the capital and the human
resources needed to manage the new business of distributing its
own products
o When the advantages of stable production are particularly high
increase in predictability of demand
o When present retailers or distributors have extremely high profit
margins
◉ ▪ Backwards integration Answer: ● A strategy of seeking
ownership or increased control over a firms suppliers
o This is a good strategy when a firm's current suppliers are
unreliable, costly, or cannot meet the firms needs
● A good strategy when
o Present suppliers are costly or unreliable
o The number of suppliers is small and the number of competitors is
large
o When the organization competes in an industry that is growing
rapidly
EXAM SCRIPT 2026 COMPLETE QUESTIONS
SOLUTIONS GRADED A+
◉ ● Research and Development
o Four approaches to determining R&D budget allocations Answer:
▪ (1) financing as many project proposals as possible
▪ (2) using a percentage of sales method
▪ (3) budgeting about the same amount that competitors spend for
R&D
▪ (4) deciding how many successful new products are needed and
working backward to estimate the required R&D investment
◉ o R&D can take two forms Answer: ▪ (1) internal R&D, in which
an organization operates its own department internally
▪ (2) contract R&D, in which a firm hires independent researchers
or independent agencies to help develop specific products.
◉ ● Benchmarking Answer: o An analytical tool used to determine
whether a firm's value chain activities are compared to rivals and
thus conducive to wining in the marketplace
,◉ ● The Internal Factor Evaluation Matrix (IFE) Answer: o This
strategy formulation tool summarizes and evaluates the major
strengths and weaknesses in the functional areas of a business
o Provides a basis for identifying and evaluating relationships
among those areas
◉ ● Long term objectives Answer: o Represent the results expected
from pursuing certain strategies
▪ Strategies represent the actions taken to accomplish long-term
objectives
▪ The time frame for objective and strategies is normally 2-5 years
◉ Nature of long term objectives Answer: ▪ Objectives should be
quantitative and measurable, realistic, and obtainable.
◉ ● Financial versus strategic Objectives Answer: o Financial
▪ Those associated with growth in revenues, growth in earnings,
higher dividends, larger profit margins, etc.
o Strategic
▪ Include: larger market share, quicker delivery, shorter time to
market, etc.
◉ ● Methods of not managing by objectives Answer: o Managing by
extrapolation
,▪ If it ain't broke don't fix it
o Managing by crisis
▪ A form of reacting rather than acting
▪ Allowing events to dictate what and when of management
situations
o Managing by subjectives
▪ There is really no method or general plan of how to do things
▪ Rather, the mentality of just do what you thing should be done - or
do your own thing the best way you know how
o Managing by hope
▪ Decisions are predicated on the hope that they will work and that
good times are just around the corner
◉ ● The Balanced Scorecard Approach Answer: o The need to
balance financial measures with nonfinancial measures
o This concept is consistent with the continuous improvement and
total quality management approach
◉ ▪ Forward integration Answer: ● Involves gaining ownership or
increased control over distributors or retailers.
o Example: manufacturers creating a website to sell direct to
consumers
o Effective method: franchising
● Especially effective when:
, o Organizations present distributors are especially expensive,
unreliable, or incapable or meeting distribution needs
o When the availability of quality distributors is so limited as to offer
a competitive advantage to those firms that integrate forward
o When an organization competes in an industry that is growing and
is expected to continue to grow rapidly
o When an organization has both the capital and the human
resources needed to manage the new business of distributing its
own products
o When the advantages of stable production are particularly high
increase in predictability of demand
o When present retailers or distributors have extremely high profit
margins
◉ ▪ Backwards integration Answer: ● A strategy of seeking
ownership or increased control over a firms suppliers
o This is a good strategy when a firm's current suppliers are
unreliable, costly, or cannot meet the firms needs
● A good strategy when
o Present suppliers are costly or unreliable
o The number of suppliers is small and the number of competitors is
large
o When the organization competes in an industry that is growing
rapidly
