One of the following statements is incorrect The liquidity ratio indicates the organization's ability to meet its current debt obligations Wal-Mart and Costco (applying cost-leadership stratergies) tend to have profit margins of 3-5% per year, whereas Apple and Google(applying differentiation stratergies) tend to have higher profit margins of 20-30% or more. Debt ratio is a measure of the amount of liabilities divided by total assets. The activity ratio of inventory turnover measures total sales divided by average inventory. Therefore companies should aim for a lower inventory turnover every quarter. Financial performance found in the firm's financial statements performance which include the balance sheet and income statement One of the following statements is incorrect: TQM uses a balanced scorecard of results measuring leadership competency, financial and market performance, customer satisfaction, workforce learning and competency, and operational improvements. Six-Sigma approach uses the DMAIC continuous improvement process stepS of Define, Measure, Analyze, improve and Control ISO 9000 requires companies to be certified by appointed third party in order to receive preference when conducting business in the European Union TQM focuses on customers (Listening and Engaging with them), Employees (Motivating, Teamwork, and Learning) and applying a Differentiation (but not Cost-Leadership) Competitive Strategy. Six-Sigma quality is equivalent to 3, 4 defects per million opportunities One of the following statements is incorrect Business growth rate market share are important dimensions in the BCG matrix According to Porter's 5-forces model, threat of substitute products is synonymous with potential new entrants affecting industry competition. In a BCG matrix, especially companies with strong R&D but weak cash position, Questions Marks should be considered for divestment. Starbucks Company removed the word "Coffee from its logo because it plans to diversify into other products and services Starbucks created Seattle's Best brand and sells their specialty coffee through Sub-way stores in order to compete directly with other fast food restaurants such as McDonalds and Dunkin Donuts. One of the following statements is incorrect: PepsiCo CEO Indra Nooyi made the strategic decision focus on Beverages and snack Foods, but spin-off the group of fast food restaurants into Yum Brands because she concluded there was "not enough" demand and profits to be made in the fast food restaurant business. During the recent global economic downturn, PepsiCo CEo Indra Nooyi made the strategic decision to invest aggressively in the BRIC countries based on broadly stated information on these countries' GNP growth and demographic trends. Apple Company can be said to adopt a differential strategy because of its focus on technological innovations, and giving customers a reason to pay higher prices for Apple products. Costco Stores be said to adopt a cost leadership strategy Southwest Airlines can be said to adopt a cost strategy because of its focus on operational efficiencies and aggressive pricing. Cost-cutters, Inc. is following the business-level strategy of overall cost leadership. Which of the following functional-level strategies is consistent with their business-level strategy? Heavy advertising Test marketing Long production runs Aggressive recruitment of human resources Recruiting high-pay celebrities as spokespersons