chpt 1 assignment answers good

chpt 1 assignment answers good - Chapter One Stud,y...

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Chapter One Stud,y questions: 1. How would you define strategy, superior performance, competitive advantage and strategic management? Strategy is a set of related and consistent actions that managers/employees take to increase the company's performance relative to competitors - in effect, actions that create and sustain competitive advantage. Superior performance is measured in two ways. The first measure is the return on invested capital and it indicates how effectively the company used its capital to generate profit. Capital consists of equity (stocks) and debt (bonds and loans). The formula for ROIC is the following: ROIC = Net Operating Profit Less Adjusted Taxes (NOPLAT)/Invested Capital Shareholders Equity + Debt The second way to measure performance is profit growth. Profit growth indicates the rate of profit growth over time (usually measured in years). The formula for profit growth is the following: Profit Growth = (NOPLAT)t+1 - (NOPLADI (NOPLAT)t Competitive advantage is when a company achieves above average performance in its return on invested capital and/or profit growth compared to its competitors. Strategic Management is the art and science of formulating, implementing and evaluating strategies that will enable an organization to achieve its objectives. 2. What are the three different levels of strategy and what role does each play in the strategic management process? The three levels of strategy are corporate, business and
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chpt 1 assignment answers good - Chapter One Stud,y...

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