Business Studies Questions & Answers

What is Netflix’s long-run objective? How does Netflix plan to achieve its long-run objective?  How would you assess Netflix’s business model Netflix has long-run objectives such as growth and increases market share in a billion dollar market. The company is trying to go public with an initial public offering.   Netflix plans to achieve its long-run objectives by building and enhancing customers’ brand loyalty in Netflix. It provides subscribers various features to encourage them to stay with the company. For example, it offers one month free trials to potential subscribers with an unlimited number of DVD rentals.  Netflix’s performance has been good in the sense of continued revenue growth and increased market share. Even though Netflix has incurred net losses in their first couple years, their outlook is positive for future growth into profits.   2. Why does McCarthy use a subscriber model to forecast Netflix’s future cash flow r...

Do you agree with the claim that “GE experienced a sustained competitive advantage under Jack Welch, while it experienced a sustained competitive disadvantage under Jeffrey Immelt”? Why or why not? While the historic shareholder’s rate of return may lead to the conclusion that GE only experienced a sustained competitive advantage during Jack Welch’s tenure, and not during that of Jeffrey Immelt, in this particular case it is uncertain at best. A sustained competitive advantage does not rely on a single person. However, this is exactly what this analysis of shareholder value creation is indicating. The sudden drop in shareholders’ returns that coincides with the time of the change in leadership suggests that GE’s competitive advantage left with Jack. Still, it cannot be assumed that the only explanation for this sudden change in shareholders’ returns is a loss in competitive advantage for the firm resulting in the change of CEO. Investor sentiments influence thei...

1.       Why was Circuit City so successful as to be featured in Good to Great? What was its strategic position during its successful period? How did it contribute to competitive advantage? Circuit City developed world-class capabilities in logistics that enabled it to track trends and have inventory in its geographically dispersed stores. Additionally, Circuit City developed a core of motivated and knowledgeable sales staff. Circuit City employed a big-box strategy with stores that had a large footprint that stocked a variety of products (selection) and service that relied on economies of scale to achieve high sales volumes. High sales volume enabled competitive pricing, but it also resulted in lower profit margins. At the time, this concept was relatively new, and it related to a differentiation strategy. Circuit City was able to achieve a competitive advantage, because its system of stores, trained salespeople, and logistics system were diff...

1.       Analyze the structure of the mobile technology industry. How has it evolved in recent years? The mobile technology industry is best characterized as an oligopoly with a few (large) firms, differentiated products, some pricing power, and relatively high entry barriers. Major players include Amazon.com, Google, Apple, and Microsoft, which both compete against and cooperate with one another at multiple levels (strategic interdependence). The next table shows how their product and service offerings overlap across multiple categories. Current trends indicate a move toward greater convergence, as these companies fill in the gaps to compete directly against one another in multiple product and service markets. For example, Amazon.com released the Kindle Fire, a tablet version of its popular e-reader in 2011, entering the mobile device market once dominated by Apple. It now offers a full line of digital content (books, movies, and video) to compete wit...

1.     Use the following information to answer the questions below. Assume that the capital account is equal to 0. Net unilateral transfers 2 50 Exports of goods and services 500 Net increase in the U.S. government’s nonreserve foreign assets 30 Net increase in foreign ownership of U.S.-based nonreserve assets 400 Net increase in U.S. private assets abroad 250 Invest income received in the United States 200 Net increase in U.S. ownership of official reserve assets 20 Imports of goods and services 600 Net increase in foreign ownership of U.S.-based reserve assets 100 Investment income paid abroad by the United States 300 a.    What is the current account balance? b.   Does the capital account equal the current account? c.    What is the statistical discrepancy? Answers: a....

STARBUCKS (Failure in Australian Market)       Introduction In economics, market failure is a situation in which the allocation of goods and services is not   efficient. That is, there exists another conceivable outcome where an individual may be made better-off   without making someone else worse off. Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that are not efficient – that can be improved upon from the societal point of view.  The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher   Henry Sidgwick. Market failures are often associated with   time-inconsistent preferences, information asymmetries, non-competitive markets,   principal-agent problems,   externalities, or the public.  The existence of a market failure is often the reason that self-regulatory organizations, governments ...