Question

1. What is the significance of EBITDA when analyzing how an organization competes in its industry?
2. How do we create economic value within a firm?
3. What are the 5 key characteristics of a strategic decision?
4. What is the difference between the general environment and the industry environment?
5. Describe the benefits and costs that are associated with entry barriers.
6. Define Judo Strategy and provide an example.
7. Why is coordination and control essential when diversifying?
8. What is the sixth force of industry competition and describe its role within an industry?
9. What are the cost of using the market instead of vertically integrate?
10. What are the benefits of using the market instead of vertically integrate?

Answer 1

EBITDA depicts the overall operating performance of a company. It helps compare various companies from different systems in terms of their operational efficiency. EBITDA is the earnings before interest, tax, depreciation, and amortization. Thus it eliminates the financial and tax implications of the business. It looks purely at how well the company can do if it did not consider the various external liabilities. For example, USA and Germany may have different tax system. However, if we need to compare the two companies from these countries we should look at their operating performance. This is depicted by EBITDA.