Exam (elaborations)
Certified Internal Auditor, Part 3 (1).
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- CISA: Domain #2, Part A: IT Governance
Certified Internal Auditor, Part 3 (1).
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Certified Internal Auditor, Part 3Motivation theorists - ANS-Taylor (scientific management); Maslow (hierarchy of needs);
Herzberg (2-factor theory)
Maslow's Hierarchy of Needs - ANS-Concept - Lower needs must be met before the next
becomes important
(1) Psychological, (2) Safety, (3) Social, (4) Esteem, (5) Self-actualization
4 Characteristics of an Organization - ANS-Coordination of efforts, Common goal, Division of
labor, Hierarchy of authority
BCG Matrix - ANS-Assumption - As a business/product develops, per unit cost drops. The
company with the largest market share has the lowest marginal cost.
Factors - Market growth, Market share
Categories - Star, Cash cow, Question mark, Dog
GE Matrix (developed my McKinsey) - ANS-Evaluates products/business units by industry
attractiveness and company strength
Categories - Invest, Protect (invest if you have extra $), Harvest (invest enough to operate),
Divest
Strategic Planning: Steps - ANS-Mission/value --> goals/objectives --> Strategy -->
Plans/actions
Competitive strategies - ANS-Differentiation, Cost leadership (low prices), Focus
Blue Ocean v Red Ocean Strategy - ANS-Blue - industries not currently in existence
Red - Established market spaces that are slowly and steadily shrinking (differentiation is
inherent)
McKinsey 7s Framework - ANS-Purpose - Helps organization assess how its structure helps it
achieve objectives
Hard (easy to change) - strategy, structure, systems
Hard+Soft - shared values
Soft (difficult to change) - skills, staff, style
Supply Chain Management: Keys to Success - ANS-Narrow breadth of supply chain with
long-term financial and quality commitments between buyers, suppliers, manufacturers,
distributors, etc.
, Value Chain - ANS-Objective: Ensure value is added at each step of the supply chain to achieve
customer satisfaction
Markup Pricing - ANS-Used in retail
Percentage added to the retailer's invoice price
Cost-plus Pricing - ANS-For non-routine situations
Product cost plus profit amount/percentage
Target Pricing - ANS-Aka Rate of Return Method
Total costs plus desired rate of return
Skimming Policy - ANS-Used by monopoly companies
Charge high price at first and then lower as competition increases
Penetration Policy - ANS-Charge low price on a new product to discourage competition
Price Fixing - ANS-** Illegal in the US **
Competitors agree to increase or decrease prices
Price Discrimination - ANS-Seller charges customers different prices for same product
Loss Leader Pricing - ANS-Primary product is priced at or below cost to attract more customers
Predatory Pricing - ANS-Charge lower prices to drive out competitors
Drip Pricing - ANS-** Illegal in the US **
Additional charge are added without telling the customer at the beginning
Price Discounts - ANS-Price reductions to attract customers
Conditional Pricing - ANS-Prices are based on volume, bundled discounts, exclusive dealing
Product Life Cycle Phases - ANS-1 - Introduction - high product, low profits
2 - Growth - Sales and profits increase as the market tries and adopts the product
3 - Maturity - Sales exceed profits due to competition; advertising costs increase
4 - Decline - Sales decline; drop, alter or keep the product?
Market Opportunity Matrix - ANS-Purpose: Assess the viability of new products
2 dimensions: Level of attractiveness and probability of success
Market Basket Analysis - ANS-Marketing tool that studies the purchasing behavior or
consumers; looking for relationships between products a customer is/has purchased
Objective - Inform decisions on promotions, discounts
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