Exam 13: Strategy, Balanced Scorecard, and Strategic Profitability Analysis

An analysis of Rodney Corporation's operating income changes between 2011 and 2012 show the following: Required: Is Rodney's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

What is the primary purpose of the balanced scorecard?

Bosely Corporation is reviewing its business strategy. The first step for Bosely is to perform an industry analysis. You have been hired to help the company go through the strategy formulation process. Required: To perform the industry analysis, what areas should Bosely focus on and give at least one example of how Bosely can effectively deal with each area.

Unused capacity is difficult to determine for:

An operating income analysis of Deb Nunn Incorporated revealed the following: Nunn's operating income gain is consistent with the:

Downsizing often means eliminating jobs, which can have an adverse effect on employee morale.

The growth component of a change in operating income measures the effect of price changes on revenues and costs.

For each of the following measures, identify which perspective of the balanced scorecard it represents: financial, customer, internal-business-process, or learning-and growth. 1. service response time 2. market share 3. gross margin percentage 4. defect rates 5. customer satisfaction 6. information system availability 7. new-product development time 8. economic value added 9. employee education 10. manufacturing downtime

An increase of operating income from one year to the next indicates a company's strategy was successful.

Companies that have been successful at cost leadership will show large favorable price-recovery and growth components when analyzing profitability.

What is reengineering. Can you contrast a reengineering approach to change with a kaizen approach to change?

The number of complaints about a product is an example of a balanced-scorecard measure of the:

________ is the ratio of the quantity of output produced to the costs of all inputs used, where the inputs are combined on the basis of current period prices.

Reengineering is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction.

Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components: Required: a. What is the partial productivity of direct materials for each year? b. What is the partial productivity of direct manufacturing labor for each year? c. Did each area improve between 2011 and 2012? Explain. d. What will be the projected direct material and labor needs for 2013 if remote control units increase by 12,000 units, assuming Power Company applies the constant returns to scale technology?

________ translates an organization's mission and strategy into a comprehensive set of performance measures that provide the framework for implementing its strategy.

When analyzing the change in operating income, the strategy component of price-recovery will increase when:

Answer the following questions using the information below: Stewart Corporation plans to grow by offering a sound system, the SS3000, that is superior and unique from the competition. Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy. -To further company strategy, measures on the balanced scorecard would most likely include:

Managers need to evaluate the success of a strategy by:

Unused capacity is the amount of productive capacity available over and above the productive capacity employed to meet customer demand in the current period.