C201 BUSINESS ACUMEN STUDY GUIDE QUESTIONS AND
SOLUTIONS 2025/2026 ALL GRADED A+
✔✔Why organizations are in business - ✔✔Purpose is reflected in mission, vision,
values, strategy, profit model
✔✔Mission - ✔✔The intention or purpose of the business, answers why are we in
business?
✔✔Vision - ✔✔What organization wants for the future, who we are and where we are
heading
✔✔Values - ✔✔Guiding principles and or beliefs, how we work and who we are. What
kind of organization we want to create in pursuit of our vision
✔✔Strategy - ✔✔Goals directions to achieve goals and policies to support. How we are
going to compete and achieve our mission and what makes us different
✔✔Profit model - ✔✔Plan for how organization generates revenue, why customers are
willing to pay
✔✔Competitive strategy - ✔✔Broad framework of principles that guide day to day
decisions affecting business.
✔✔Primary focus of competitive strategy - ✔✔Operational excellence, product/service
leadership, customer intimacy
✔✔Operational excellence - ✔✔Price/cost-based strategy, combo of price, quality,
dependability, ease of purchase, minimizing Waze, rewarding efficiency
✔✔Product/service leadership - ✔✔Innovation based strategy, product development,
market exploitation, best products, better ideas, commercialize faster
✔✔Customer intimacy - ✔✔Solution-based strategy, creating results for customers by
building bonds to build loyalty
✔✔Market position - ✔✔Star: high market share high growth potential, use cash,
sustained growth, high profit
Question mark: low market share hi market growth, use cash ability to generate profit is
unknown because low market share
Dog: Low market share low market growth, uses cash from other segments
Cash cow: hi market share low market growth, cash used to develop businesses and
other segments, such as question mark's
, ✔✔Business life cycle - ✔✔Start up, growth, mature, decline
✔✔Start up lifecycle - ✔✔New, little to no policies, focus on obtaining capital, marketing
products, initial sales, cash conservation
✔✔Growth life cycle - ✔✔Focus on growing sales, increasing the distribution and
Efficiently produce products to meet demand, begin standardizing procedures policies
✔✔Mature business lifecycles - ✔✔Focus on maintaining marketshare, improving
productivity, reduce costs, improvements to products are evolutionary, greater amounts
of cash on hand
✔✔Decline business lifecycle - ✔✔Revenues are declining, decide to reinvest, create
new, or maximize profits with current products
✔✔Linking business strategy and comp strategy - ✔✔Should be aligned with rewards
strategy, HR strategy business strategy and comp strategy, comp is often large
percentage of operating cost
✔✔Elements of comp plan directly influenced by org bsns strategy - ✔✔Investment in
resources, fixed and variable comp, market competitive posture
✔✔Investment in resources - ✔✔Bottom line directly related to investing in HR
resources including comp resources. Bottom line increases = more comp and HR
resources. Willing to invest more If high return predicted
✔✔Fixed and variable comp - ✔✔The mix may be impacted by bottom line
✔✔Market competitive posture - ✔✔The bottom line determines position in the market.
Market median or market upper quartile, lead, lag, lead lag
✔✔Why do orgs use financial reports - ✔✔Standardize data across companies and
industries, promote consistency of financial communication, provide information to Key
constituents(leaders, managers, shareholders, lenders, govt)
✔✔Types of financial reports - ✔✔Annual report - shows 12 mos result, called the
school year, sometimes matches calendar year sometimes not. Quarterly report - shows
basic financial results for three months. Compares to previous year same quarter and
cumulative comparables, not as detailed
✔✔Types of financial statements - ✔✔Balance sheet, income statement, cash flow
statement
SOLUTIONS 2025/2026 ALL GRADED A+
✔✔Why organizations are in business - ✔✔Purpose is reflected in mission, vision,
values, strategy, profit model
✔✔Mission - ✔✔The intention or purpose of the business, answers why are we in
business?
✔✔Vision - ✔✔What organization wants for the future, who we are and where we are
heading
✔✔Values - ✔✔Guiding principles and or beliefs, how we work and who we are. What
kind of organization we want to create in pursuit of our vision
✔✔Strategy - ✔✔Goals directions to achieve goals and policies to support. How we are
going to compete and achieve our mission and what makes us different
✔✔Profit model - ✔✔Plan for how organization generates revenue, why customers are
willing to pay
✔✔Competitive strategy - ✔✔Broad framework of principles that guide day to day
decisions affecting business.
✔✔Primary focus of competitive strategy - ✔✔Operational excellence, product/service
leadership, customer intimacy
✔✔Operational excellence - ✔✔Price/cost-based strategy, combo of price, quality,
dependability, ease of purchase, minimizing Waze, rewarding efficiency
✔✔Product/service leadership - ✔✔Innovation based strategy, product development,
market exploitation, best products, better ideas, commercialize faster
✔✔Customer intimacy - ✔✔Solution-based strategy, creating results for customers by
building bonds to build loyalty
✔✔Market position - ✔✔Star: high market share high growth potential, use cash,
sustained growth, high profit
Question mark: low market share hi market growth, use cash ability to generate profit is
unknown because low market share
Dog: Low market share low market growth, uses cash from other segments
Cash cow: hi market share low market growth, cash used to develop businesses and
other segments, such as question mark's
, ✔✔Business life cycle - ✔✔Start up, growth, mature, decline
✔✔Start up lifecycle - ✔✔New, little to no policies, focus on obtaining capital, marketing
products, initial sales, cash conservation
✔✔Growth life cycle - ✔✔Focus on growing sales, increasing the distribution and
Efficiently produce products to meet demand, begin standardizing procedures policies
✔✔Mature business lifecycles - ✔✔Focus on maintaining marketshare, improving
productivity, reduce costs, improvements to products are evolutionary, greater amounts
of cash on hand
✔✔Decline business lifecycle - ✔✔Revenues are declining, decide to reinvest, create
new, or maximize profits with current products
✔✔Linking business strategy and comp strategy - ✔✔Should be aligned with rewards
strategy, HR strategy business strategy and comp strategy, comp is often large
percentage of operating cost
✔✔Elements of comp plan directly influenced by org bsns strategy - ✔✔Investment in
resources, fixed and variable comp, market competitive posture
✔✔Investment in resources - ✔✔Bottom line directly related to investing in HR
resources including comp resources. Bottom line increases = more comp and HR
resources. Willing to invest more If high return predicted
✔✔Fixed and variable comp - ✔✔The mix may be impacted by bottom line
✔✔Market competitive posture - ✔✔The bottom line determines position in the market.
Market median or market upper quartile, lead, lag, lead lag
✔✔Why do orgs use financial reports - ✔✔Standardize data across companies and
industries, promote consistency of financial communication, provide information to Key
constituents(leaders, managers, shareholders, lenders, govt)
✔✔Types of financial reports - ✔✔Annual report - shows 12 mos result, called the
school year, sometimes matches calendar year sometimes not. Quarterly report - shows
basic financial results for three months. Compares to previous year same quarter and
cumulative comparables, not as detailed
✔✔Types of financial statements - ✔✔Balance sheet, income statement, cash flow
statement
