QUIZES ON CLASSIC READINGS
WHAT IS STRATEGY?
1) Operational Effectiveness is about
creating a fit among the company's activities
defining a unique position
constant improvement
making trade-offs
2) Which statement is false?
The essence of strategy is described in terms of customers
Improving its organizational effectiveness it moves the firm towards the productivity frontier
Organizational effectiveness is about improvement of individual activities
Strategy is creating fit among the company’s activities
3) True or False: Companies can simultaneously improve their nonprice buyer value delivered and relative costs position.
True
False
4) True or False: According to Michael Porter, the essence of strategy is in the activities.
True
False
5) True or False: Strategic fit enhances the sustainability of competitive advantage
False
True
6) Which statement is false?
A firm’s “willingness to gamble” relates to a firm’s choice whether to pursue an opportunity which requires more
developed distinctive competences in the long run.
The SWOT analysis enables us to link a firm’s competences and resources to environmental needs in order for
them to be valuable.
The SWOT analysis allows us to define a firm’s distinctive competence.
7) True/False: One of the main strengths of portfolio planning is that it is based on the assumption that financial capital is
the scarce resource on which top management has to focus
True
False
8) Which statement is correct?
To formulate a good strategy it is necessary to define a clear objective, scope and competitive advantage, but it
is not sufficient.
To formulate a good strategy it is sufficient to define a clear objective and scope.
To formulate a good strategy it is necessary to define a clear objective and scope but it is not sufficient.
9) A firm’s scope is about
Three dimensions, namely customer/offering, geographic location, and vertical integration
Specifying where the firm will not go
All of the above
Encouraging experimentation and initiative
10) True or False: The strategy statement of a firm should be carefully developed by the strategic management team.
False
True
, VALUE CREATION AND VALUE CAPTURE
1) Exercise on return on invested capital, economic value added and enterprise value:
The following numbers were retrieved from the annual report of Barco 2018:
Barco Annual Report 2018 (in millions €)
Sales 1028
Cost of Goods Sold 615
R&D 120
Sales & Marketing 148
General & Administrative 57
Depreciation 35
EBITDA 123
EBIT 88
Interest Expense 1,5
Taxes 16
WACC 10%
Growth 8%
Fixed Assets 458
Inventory 185
Receivables 182
Current Liabilities 320
a) Calculate the ROIC for Barco in 2018.
b) Assume that these results for Barco will remain the same in perpetuity. Calculate Barco’s Enterprise Value.
WHAT IS STRATEGY?
1) Operational Effectiveness is about
creating a fit among the company's activities
defining a unique position
constant improvement
making trade-offs
2) Which statement is false?
The essence of strategy is described in terms of customers
Improving its organizational effectiveness it moves the firm towards the productivity frontier
Organizational effectiveness is about improvement of individual activities
Strategy is creating fit among the company’s activities
3) True or False: Companies can simultaneously improve their nonprice buyer value delivered and relative costs position.
True
False
4) True or False: According to Michael Porter, the essence of strategy is in the activities.
True
False
5) True or False: Strategic fit enhances the sustainability of competitive advantage
False
True
6) Which statement is false?
A firm’s “willingness to gamble” relates to a firm’s choice whether to pursue an opportunity which requires more
developed distinctive competences in the long run.
The SWOT analysis enables us to link a firm’s competences and resources to environmental needs in order for
them to be valuable.
The SWOT analysis allows us to define a firm’s distinctive competence.
7) True/False: One of the main strengths of portfolio planning is that it is based on the assumption that financial capital is
the scarce resource on which top management has to focus
True
False
8) Which statement is correct?
To formulate a good strategy it is necessary to define a clear objective, scope and competitive advantage, but it
is not sufficient.
To formulate a good strategy it is sufficient to define a clear objective and scope.
To formulate a good strategy it is necessary to define a clear objective and scope but it is not sufficient.
9) A firm’s scope is about
Three dimensions, namely customer/offering, geographic location, and vertical integration
Specifying where the firm will not go
All of the above
Encouraging experimentation and initiative
10) True or False: The strategy statement of a firm should be carefully developed by the strategic management team.
False
True
, VALUE CREATION AND VALUE CAPTURE
1) Exercise on return on invested capital, economic value added and enterprise value:
The following numbers were retrieved from the annual report of Barco 2018:
Barco Annual Report 2018 (in millions €)
Sales 1028
Cost of Goods Sold 615
R&D 120
Sales & Marketing 148
General & Administrative 57
Depreciation 35
EBITDA 123
EBIT 88
Interest Expense 1,5
Taxes 16
WACC 10%
Growth 8%
Fixed Assets 458
Inventory 185
Receivables 182
Current Liabilities 320
a) Calculate the ROIC for Barco in 2018.
b) Assume that these results for Barco will remain the same in perpetuity. Calculate Barco’s Enterprise Value.
