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GBS(CIP)

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obinno59's version from 2017-05-31 23:50

General

Question Answer
One strategy to beat a competitor is to reduce cost...however you have
to stay within your target _______ when trying to maximize ______
a. profit margin
b. market share
Net profit margin is ____/_____a.Profit
b.Revenue
Lowering prices in ____ market share can hurt you more than lowering prices in _____ market share... due to hurting ______a. Higher
b.Lower
c.Profitability
When given a P&L case about tree plantation makes sure to ask about____ of _____ influences: (3)a. economy
b. main customers: state vs city budget.
c. housing starts trends
d. mall/office developement trends
In mergers both company____ should be discusseda. cultures
If you get a case that tries to increase market share you should address 3 things1. product line: existing, new, diversifying and investigating acquisitions.
2. maintain/incre distribution channels
3.Rebuild brand and marketing
In a cost reduction case you should address four main buckets:a. costs
b. strategic value: making parts in house now vs back in the day (ex. Detroit cars)
c. alternatives
d. exit strategy
In cost reduction you should address ___and ___ cost!!! and there respective topicsa. internal: union wages, suppliers, material costs
b.interest rates, fuel cost, transportation
Company comes up with new product you wanna ask about:-Any other products out like this?
-If, not what are the substitutions?
-Fixed and variable costs?
-Patent?
-Any companies close to developing a similar product?
(Ipad)When entering a new market you should ask _________- and ____ questions:a. Industry and company
- industry trends
- flooded with new entrants?
-How have they done?
-Anyone dominating the market?
When seting a price to a product you should keep these 4 things in mind-competitive analysis
-price-based pricing
-cost-based pricing
-company objectives
Capital costs are a type of_____ costs. In fact, many people use them loosely so when they say capital costs they mean fixed costs.

You get many types of fixed costs. Fixed costs DO NOT change as you produce more product. For example, you rarely need to hire more people to increase sugar production since the factory has _________.

Within fixed costs, you can buy an ______. Think of something which has a useful life over many years like a _________(3)_________ etc.

If you were a small business and bought a delivery vehicle for $100K, you would need to take a $100K charge this year and that would take you into a loss.

So, you can spread the $100K cost over the ______ of the asset. The useful life is determined by the tax authorities but may be 5 years for the car.

In this case, you can take a $100K/5 charge each year. That charge is called _________ and is a fixed cost.

There are tax benefits to depreciate things but you do not need to know that.

_____cost must be ____ before __cost can be determined....You'll need the ___ of the asset
a. fixed
b.additional capacity
c. asset
d. car, truck, huge brewery
e. useful life
f. depreciation
g. Capital
h. Depreciated
i. Fixed
j. Life
When generating money in foreign countries you should keep ____ of ______ in mine. It's the ability to remove our dollar once we generate thema. Reparation
b. funds
ROI formula(Gain if invest-Cost of invest)/Cost of invest
OOTB: How to cut cost in Labor?a. Raise employee contribution to healthcare premium
OOTB: How to cut cost in production? (3)a
OOTB: How to cut cost in finance? (3)a. Make customers pay sooner
b. Refinance debt
c. Redesign health insurance
How could economy affect a Palm tree plantation service?The economy would affect the state of housing, malls, corporations that purchased the palm trees.
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BCG matrix

Question Answer
Products with ____ market share and _________- growth are cash cows vs ____ market share and ____ rowth are pets.
____ enerate large amt of cash in excess of the reinvestment required to maintain share. This excess in cash cows should not ______
a.High
b.Slow
c.Low
d. Low
e. be reinvested
In pets the ___ must be reinvested to maintain___. This will leave no ____throw off aka ____. It's only good for _____a. profits
b. market share
c. cash
d. worthless
e. Liquidation
___ market share vs ___ growth are considered ____. This differs from _________- market share vs ___ growth which are considered___. These usually become cash cows when the ___ slows down.a.Low
b. fast
c. Liabilities
d. high
e. high
f. stars
g. growth
For a company you want to have a balanced portfolio:
____ who's high shares and high growth assure the future
____ that supply funds for that high growth
_____ to be converted into stars with the added funds
a. stars
b. cash cows
c. Question marks
5 forces driving competition
1. potential ____
2.
3. Press from ______products: ex. sugar vs____
4. ____
5. ____
a. entrants
b. Existing competitors
c. substitution
d. corn syrup
e. buyers
f. suppliers
Value chain 5 partsa. Raw materials
b. Operations
c. Delivery
d.Marketing & sales
e.Service
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"if" scenarios to remember

Question Answer
When examining Profits always start with____ firstRevenue
If shares are flat and share is constant this could indicate that the problem is in the_____. If sales are in decline then you have to analyze these 3 things:
1. overall decline in ____
2. current market place is _________- aka ___
3. Loss of market share due to ____
a. Industry
1.. Demand
2. mature; obsolete
3. Substitution
If sales and market share are increasing but profits are declining then you need to see if the problem is with ___or ___. If ____ aren't the issue then investigate____ and see if ___ have changed.a. Rising cost
b. Dropping price
c. Product mix
d. Margins
If profits are declining bc of decrease in revenues concentrate on ___- and ____a. marketing
b. distribution
If profits are declining bc of rising expenses, focus on ___ and ___ ex ____, ___, and rent.... and ___a. Operational
b. Financial issue
c.Cost of Goods sold(COGS)
b.Labor
c.Marketing cost
If product is
-In it's emerging growth stage focus on _____, ____, and ____
-In growth stage focus on ____ and ___
-If in mature_____,____, and ___
-If in decline stage, define_____ analyze______ or think of ____
a. R&D, competition, and pricing
b. marketing, competition
c. manufacturing, cost, and competition
d. niche, competition's play, exit strategy.
____ and _________ are easier to change than industry ___: Price scenarioa. Volume
b. Cost
c. Price
___ wars are detrimental to everyone. Keep them high!!a. Price
In everycase:
Think of how the (3) affect the company
a. internet
b. economy
c. Competition: internal and external(substitution)
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Case shiney pearls

Question Answer
Eq used in P &LE(P=R-C)M
Factors that play into disposable income-Mortagage crisis
-Unemployment
-Strength of dollar(vs Euro and Yen)
-Interest rates(~30 year low?)
How can you maintain market share if it begins to fall and price of steel will incre:Expand market to cover women and youner guys wit clothing, and scooters.

wed also buy up the steel to anticipate the price increase.

We could also have some parts made overseas
Mexican Bank: If the profits have declined but the average cost per customer stays the same even though more customers are being added then what could account for a drop in profits? What could be causing this?a. Cost must be increasing proportionally
b. This could be due to gaining less profitable customers, expanding branches too aggressively(incr tellers)
How could the bank incre margins? examples:We could:
Increase interest income
Decre cost
We could segment current customers intor several tiers and adjusting service level according to tier.
educate student about using cheaper delivery methods like Atm or online....adding incentives
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Question Answer
Yello stuff chemical
If a company wants to diversify into a high-growth industry what questions would you ask?
What type of business are you ___ vs____
Define high growth to them?
How much risk they are willing to take?
Are there any synergies available?
Are we B2B or consumer based?
If Coke wants to increase profitability by increasing prices what do you have to consider?How many cans are sold and for how much?
100 mil at 23 cents and 6% growth
If Coke raises price to 27 cents and a growth of 1% would it be worth it?100 mil x .27 cx1.01=$27,270,000
100milx.23cx1.06=$24,380,000

=$2,890,000
How can Pepsi respond?They can either increase price, keep same price, or drop price...if you do the same calculations you should be able to determine which actions is most efficient.
How would GE decide to price light bulbs that never burn out. What questions do you have to ask?-Patent?
-Any competitors?
-R&D cost?
-Any advantages?
If a normal LB cost 5 cents to make and consumers buy it for 75 cents how could we come up with a price for the lifetime bulbs?Would a consumer pay $75 for a light bulb or

Assume normal bulbs last 1 yr and people have this new light bulb for 50 years would someone pay$37.50(50x .75 cents) for a bulb?
For light bulbs that last forever what economic factors w=do we need to keep in mind? What options do we have to prevent our main concern?We have to make sure cannibalization doesn't occur: The long lifespan of the lifetime bulbs could eat up the profits of our normal bulbs.

We could turn away from consumer market and look towards industrial market.
Town street lights: If normal light bulbs cost $20 and labor for 2 workers is $150 and they have to be changed twice a year it's clear to see they would be tempted to purchase from us to reduce LT cost.
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Question Answer
If Dupoint made a material ideal for diapers what would you need to do to determine if it's worth entering the market?Size of the market
How would you determine the size of a diaper market?Avergage life expectancy: 80 y/o
US pop: 320 million
4 mill/ per age group
kids wear diapers: 0-3(80% disposable)
9.2 million x 5 diapers a day: 50 millionx 365=18.2 Billion x $1/diaper=$18.2 billion a yr
After determining MS: What next?1. Identify key players & MS
2. How to enter? JV, Buy smaller, Greenfields, License
The main difference b/w JV vs ____?1. JV: Since we're unknown in this industry: We would probably only manufacture which could be limiting
2. Buy a smaller company: Would have to manufacture and market the diapers
Difference btw License and JVLicense: We could manufacture for multiple companies
JV: Partner company would probably want exclusivity
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Question Answer
NYC opera wants to develop a growth strategy for the next 5 years...what questions would you ask?1. Is the industry growing? No, down 7%
2. How are we doing compared to industry? alright, growth of 2%
3. Who are our competitors?
Who would we consider competitors?Anyhting that competes with Leisure: sports, Other opera companies( 4 others)
Once competitors are identified what next?We can analyze revenue streams:
Ticket sales, sales of programs, drinks, merchandise.
How could we increase these streams?1. Increase the amt of plays a year
2. Discounts for large groups, seasonal tix, senior citizens, and students
3. Add new distribution channels
What else could we increase growth besides incre traditional R-C?Differentiate b/w customers who represent profit and those who represent cost.
We should focus on bringing in new profitable customers by changing how we market. This means we should develop better relationships with our profitable customers
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Question Answer
If our company is a discount brokerage and they dropped from #6 to #7 (with a 10% growth), how can we gain the #6 spot again? How do we focus on our target goal?1. ignore players significantly below us
2. Ignore the top players especially if they remained top players
What questions would you ask?Should we assume growth rates will remain the same?
If our projected revenue for our competitor is 772 an our revenue this year is 660 how do we calc the growth needed to take that slot?772/660=1.17= 17% minimum growth
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