E2: Chapter 2 – Knowledge Check: Alternative approaches to business models

To which perspective on the balanced scorecard framework do the following questions correspond?

“How can we enhance and sustain our ability to change and improve so as to achieve our vision? How can we persist in creating value and maintaining the company’s competitiveness?”

In the modern “creating value” environment, which of the following statements are true?

1. Reducing the price one pays to a supplier that is dependent on you, is one of the best ways to create value.
2. Improved cycle times, productivity and efficiency can be achieved through expert process mapping and re-engineering.

When creating a business model, there are generally considered to be 4 stages involved in the definition of value. Which of the following stages form part of the value definition component? (Select ALL that apply)

In the modern “creating value” environment, which of the following statements are true?

1. Shareholders are the only party to benefit from created value.
2. Only tangible value matters.

“When value is created, it is to be shared with others – primarily shareholders (in the form of dividends), but other stakeholders too. In this context, the stakeholders other than shareholders will most likely include: the board of directors, government tax agencies, and the organisation itself in the form of retained earnings for future investments in business operations”.

Which of the following is being described above?

Which TWO of the following are key factors involved when establishing ‘cost architecture’ within the ‘cost model’ of residual value?

Lethargo Ltd is a company that designs and manufactures office furniture and equipment. It is a family company that has been in existence since the 19th century, with a long tradition of creating high-end, reliable and comfortable office furniture. They have a loyal base of repeat customers whom they reward with occasional discounts and prizes. Over the years have kept their main shareholders very content with regular and generous dividend payments. Their employees consistently give positive reviews and feedback when surveyed on work conditions and pay.

Recently, Lethargo has started to see its profit margins fall rapidly. The Sales and Marketing team has noticed that potential commercial customers are increasingly inquiring about the ability of Lethargo office equipment to be connected and integrated with mobile devices and various kinds of modern hardware. Most of these propsects do not call back when they discover that none of Lethargo’s offerings can be so connected/integrated.

Which perspective of the Balanced Scorecard has Lethargo neglected?

Grimesy Ltd is a recently founded company that is looking to disrupt the housing industry in Monoland. Their mission is to produce affordable, prefabricated houses using environmentally sustainable materials and processes. However, not long after launching, they run into some problems. They discover that there is only one logging company – Sire Woods Co. – in Monoland that has received governmental certification as a sustainable supplier of wood. As such, Sire Woods is one of the most expensive wood suppliers in the entire region, as they have an effective monopoly on certified sustainable wood supplies within Monoland. Grimesy realises that their projected price points for their prefabricated houses will not generate anywhere near the expected profits, if they source their wood from Sire Woods Co.

Which of the following would Grimesy have most benefitted from performing prior to launching?

To which perspective on the balanced scorecard framework do the following questions correspond?

“What processes must we excel in in order to acheive our financial and customer objectives? How can we aim to improve our company’s operations and decision-making?”

When it comes to defining value as part of the value creation process, an organisation needs to focus on…

From the list below, choose only those options that comprise the key stages of the business model: (Select ALL that apply)

According to CIMA, 5 main characteristics must align and connect in order to successfully create value. Those are: (select ALL that apply)

Taregat is a company that delivers online education in the area of photography. In recent years, Taregat has really distinguished itself by investing heavily in its learning platform, employing state of the art softwares and functionalities, allowing students to access all manner of metrics and novel facilities that no other provider of online photography education can match. However, Taregat has recently begun to receive more complaints than usual. Customers have been criticising the content of the courses, saying that the basic quality of the classes is far lower than the quality of those offered by competitors, with much of the content being quite outdated.

Which of the following has Taregat neglected?

Into which ONE of the following categories within the ‘balanced scorecard’ would a company adopting a new manufacturing technology that cuts production times by 50% fit?

According to CIMA, stakeholder analysis involves ranking stakeholders based on a number of relevant attributes. Choose those attributes from the list below: (select ALL that apply)

You are the owner of a small business that produces and sells homemade toys and action figures. All sales are made via an online store that you created. You market your products through a number of popular social media platforms, as well as with free blog posts on various aspects pertaining to toys and action figures. However, you are disappointed with the uptake, and you are keen to improve how and where you target customers. You decide to perform more detailed analysis on the browsing habits, engagement recency and frequency, purchasing patterns, and other online and offline activities of both your existing customers and potential customers.

What kind of analysis are you resolving to perform in the above example?

Which of the following is not a stakeholder that will share a business’s residual value?

(Note: residual value here is the surplus between revenue and costs).

Choose the option that is NOT a reason for using the balanced scorecard: