BSG Comprehensive Exam (Fall 2019) questions and answers
A+ Grade
The benefits of pursuing a strategy of social responsibility and corporate citizenship include
- correct answer · 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
- correct answer · 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
- correct answer · 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
- correct answer · 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?
- correct answer · 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
- correct answer · 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%.
- correct answer · 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?
- correct answer · 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
- correct answer · 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?
- correct answer · 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?
- correct answer · 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
- correct answer · 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?
- correct answer · Increase the company's dividend payment to shareholders, each year by at least $ per
A+ Grade
The benefits of pursuing a strategy of social responsibility and corporate citizenship include
- correct answer · 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
- correct answer · 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
- correct answer · 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
- correct answer · 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?
- correct answer · 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
- correct answer · 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%.
- correct answer · 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?
- correct answer · 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
- correct answer · 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?
- correct answer · 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?
- correct answer · 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
- correct answer · 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?
- correct answer · Increase the company's dividend payment to shareholders, each year by at least $ per
