Grade 2026\2027
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 If a company's manager wants to succeed in creating a differentiation based on
competitive advantage (and a potential cost advantage in achieving this differentiation) that is difficult
for rivals to quickly or easily copy (because every strategy 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 manages have to
- correct answer do a better job than rivals in identifying and implementing ways to become very cost
efficient in producing and marketing 350 to 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 lower tariff on footwear sales in LA (because no import tariffs are paid on footwear
produced at the LA plant and shipped to the distribution warehouse in LA)
A company stands a better chance of achieving 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 Competitive Intelligence
Reports)
- are successful in identifying what actions promote greater cost efficiency across all aspects of company
operations and in actually achieving the cost-reducing opportunity without overspending to do so, while
many rivals also striving to win a low-cost advantage fall short in their efforts to achieve matching cost
reductions.
Which of the following does NOT help a company's social responsibility strategy results in a higher
image rating
- correct answer spending additional money on celebrity endorsements and advertising to help inform
, the general public about the company's good deeds in being a good corporate citizen and its socially
responsible activities
- reducing the prices the company charges its customers for branded footwear
Some social responsibility and citizenship actions have a bigger positive impact on your
company's Image Rating than do others.
- correct answer The biggest impacts relate to "green" footwear materials and
charitable contributions, not so much because they are "more important" than the other four as
because
they are more visible to the public (and can entail bigger dollar expenditures).
It makes good economic sense for company managers to consider investing $3.5 mil /mil pairs of
capacity for a plant facilities upgrade that will boost labor productivity by 25%
- correct answer At plant that currently has labor productivity of 3,200 pairs/worker and total employee
compensation of $20,000 annually because the upgrade will cause labor costs/pair produced to decline
from $6.25 to $5.00
Labor costs/pair = 20,000/3,200 = $6.25
After increase in productivity = 20,000/(3,200*1.25) = $5.00
Reduction = $1.25
- boost at a plant where $18,000 for 3,000 pairs vs. $4,000 for same 3,000.
which of the following combination of actions will likely provide the biggest competitive benefits in
helping a company achieve a differentiation-based competitive advantage over 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 7 star or higher S/Q in all 4 regions, rebate $9 in all 4 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 offering 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/q ratings, many models, high celebrity appeal, and above
avg. advertising expenditures.