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BSG Comprehensive Exam
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- RSM100 Midterm 1 Prep
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- RSM100 Midterm 1 Prep
BSG Comprehensive Exam
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BSG Comprehensive ExamThe benefits of pursuing a strategy of social responsibility and corporate citizenship
include - ANS-· The positive impact that such a strategy has on the company's image
rating, provided the company spends a meaningful amount on socially responsible
activities and such spending is sustained over a multi-year period
If a company's managers want to succeed in creating a differentiation-based
competitive advantage (And a potential cost advantage in achieving the differentiation)
that is difficult for rivals to quickly or easily copy (because every strategic move a
company makes to outcompete rivals and gain a competitive advantage is not apparent
from information contained in the FIR and the competitive intelligence Report), then the
managers have to - ANS-· Do a better job then rivals in identifying and implementing
ways to become very cost-efficient in producing and marketing 350-500 models/styles
of branded footwear that also have the highest S/Q rating in the industry
Valid reasons to consider building a new plant in Latin America include - ANS-· Low
tariff costs on footwear sales in Latin America (because no import tariffs are paid on
footwear produced at the Latin American plant and shipped to the distribution
warehouses in Latin America)
A company stands a better chance of achieving a sustainable cost-based competitive
advantage over rivals if its managers - ANS-· Pursue a number of cost-reducing
initiatives that can be concealed from rivals (because such initiatives are not part of the
information contained in the FIR and the competitive intelligence report)
Which of the following actions does not help a company's social responsibility strategy
result in a higher image rating? - ANS-· Reducing the prices, the company charges its
customers for branded footwear
What does help a company's social responsibility strategy and results in a higher image
rating - ANS-· Using environmentally friendly or 'Green' materials in producing footwear
at the company's plants
· Using recycled packaging materials to box each pair of athletic footwear at the
company's distribution centers
· Making donations to charities and charitable causes
,· Investing to improve energy efficiency and the use of renewable sources at company
facilities.
It makes good economic sense for company managers to consider investing $3.5
million per million pairs of capacity for a plant facilities upgrade that will boost labor
productivity by 25%. - ANS-· At a plant that currently has labor productivity of 3,200
pairs per worker and total employee compensation of $20,000 annually because the
upgrade will cause labor costs per pair produced to decline from $6.25 to $5.00
o Labor cost per pair = Compensation/Productivity
o Labor cost per pair initially = 20,000/3,200 = $6.25
o After increase in productivity = 20,000/ (3,200*1.25) = $5.00
o Reduction = 6.25 * 5.00 = $1.25
Which of the following combinations of actions will likely provide the biggest competitive
benefits in helping a company achieve a differentiation-based competitive advantage
over some/many of its rivals? - ANS-· Offering 400 or more models/styles to buyers in
all four geographic regions, maintaining a celebrity appeal rating of 200 or higher in all
four geographic regions, selling branded footwear with a 7-star or higher S/Q rating in
all four geographic regions, and offering a rebate of $9 in all four geographic regions
It is both reasonable and wise for a company to consider shifting away from pursuit of a
strategy to strongly differentiate its branded footwear from the offerings of rival
companies and sell its footwear at a premium price when - ANS-· A big percentage of
industry rivals are trying to outcompete each other with copycat differentiation strategies
that include high S/W ratings, many models/styles, high celebrity appeal ratings, and
above-average advertising expenditures
Which of the following is NOT of much significance to company manager in deciding
whether profitable opportunity exist to build (or purchase) additional plant capacity in the
upcoming decision round? - ANS-· Information in the most recent FIR indicates that
more than half of the companies in the industry have expanded their plant capacity
since year 10
What IS significant to company managers in deciding whether profitable opportunity
exist to build (or purchase) additional plant capacity in the upcoming decision round? -
, ANS-· The growth in branded demand and private-label demand over the next 3 years
(as reported in each year FIR)
· How branded pairs available for sale in each geographic region in the past year
compared with projected branded demand and private label demand in each geographic
region over the next three years as shown in each year FIR
· The size of beginning inventories of branded footwear in each geographic region
reported in the most recent FIR
· Whether the most recent years FIR shows that the industry already has more than
enough production capacity worldwide to supply the combined demand for branded
footwear and private-label footwear worldwide for each of the next three years
If a company's actual results for revenues, net profits, EPS, and ROE turn out to be
worse than projected then it is usually because - ANS-· The competitive efforts exerted
by rival companies to capture sales and market share for themselves in one or more
geographic regions proved stronger than company manager anticipated, given the
estimates they entered for the various industry averages affecting internet sales and
branded wholesale sales on the sales forecast screen
Which of the following are affective ways for manager to try to boost a company's stock
price? - ANS-· Increase the company's dividend payment to shareholders, each year by
at least $ per share, repurchase shares of common stock, and make every effort to
achieve annual increases in earnings per share.
Which of the following is an advantage of having plants to manufacture athletic footwear
in all four geographic regions? - ANS-· Reduced exposure to adverse exchange rate
cost adjustments (because having plants in all four geographic regions typically enables
a company to reduce cross region shipments of pairs that are subject to unfavorable
shifts in exchange rates)
One of the lessons about competing in a globally competitive marketplace that comes
from "playing" the Business strategy game is that - ANS-· The dynamic, ever evolving
nature of competition makes it advisable for managers to make strategic adjustments of
one kind or another on an ongoing basis to improve the companies competiveness
vis-à-vis rivals and boost its overall performance
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