BSG COMPREHENSIVE EXAM QUESTIONS &
ANSWERS
The benefits of pursuing a strategy of social responsibility and corporate citizenship
include - Answers - · 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 - Answers - · 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 - Answers - ·
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)
· 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%. - Answers - · 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? - Answers - · 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 - Answers - · 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
A company stands a better chance of achieving a sustainable cost-based competitive
advantage over rivals if its managers - Answers - · 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? - Answers - · 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 - Answers - · Using environmentally friendly or 'Green' materials in producing
footwear at the company's plants
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? - Answers - · 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? -
Answers - · 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
ANSWERS
The benefits of pursuing a strategy of social responsibility and corporate citizenship
include - Answers - · 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 - Answers - · 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 - Answers - ·
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)
· 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%. - Answers - · 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? - Answers - · 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 - Answers - · 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
A company stands a better chance of achieving a sustainable cost-based competitive
advantage over rivals if its managers - Answers - · 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? - Answers - · 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 - Answers - · Using environmentally friendly or 'Green' materials in producing
footwear at the company's plants
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? - Answers - · 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? -
Answers - · 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
