As a financial analyst, you have just been handed the 2012 financial report of Firm A, a large, global pharmaceutical company. Firm A competes in both traditional pharmaceutical products and in evolving biotechnology products. The following data (in billions) on Firm A and the pharmaceutical industry are available:

Firm A Industry Average

Sales $2.00 $0.960

Net income 0.54 0.096

Advertising 0.04 0.160

Research and development 0.16 0.240

New investment in facilities 0.20 0.240

Given these data, evaluate the cost management performance of Firm A.

14.

LO.2 & LO.3 (Cost management and strategy)

Following are descriptions of three businesses. For each, assume that you are the CEO. Identify the most critical information you would need to manage the strategic decisions of that business.

a. Private hospital that competes on the basis of delivering high-quality services to an

Upscale clientele

b. Small, high-technology firm that has just developed its first product, will begin sales

in the coming quarter, and has five other products under development

c. American Sugar Company, which is a large firm that competes in the commodity

refined sugar industry.