BUS 490 Test 1 questions with 100% correct answers

BUS 490 Test 1Which of these could be an example of a competitive advantage? a. The status of a company with the largest top line sales number in an industry b. A solid company with predictable sales and profitability every year, delivering predictability for its shareholders c. A start-up company with an innovative new product that changes an industry d. The ability of a firm to outperform its rivals by achieving greater profitability and growth than others in the industry - correct answer d Strategic managers may believe that they have to choose between what is best for the shareholders versus what is best for the company's customers and employees to achieve a competitive advantage. However, there is good evidence to suggest that the best way to maximize the return to shareholders is to focus on the customers and employees. Which of these scenarios is an illustration of that evidence? a. A restaurant company decides to operate with fewer employees, causing customer service to suffer, in order to increase its return to shareholders. b. A manufacturing business routinely hires full-time employees to fill seasonal spikes in demand and then cuts their hours during slow times to lower costs and continue to pay high shareholder dividends. c. A tech company determines that it should pay its top-performing employees above-market wages, decreasing shareholder returns in the short-term. But the employee longevity - correct answer c Compare these four companies. Which of these companies has achieved a sustained competitive advantage? a. A technology company that just launched a breakthrough product, but has not yet earned enough in sales to cover the research and development b. A start-up boutique retailer went from three stores to 120 in just two years. Even with this explosive growth and the investment in new stores, the firm turned a profit in both of its two years of operation. c. A manufacturer that posted profits for several decades that were higher than the industry average, but lessening demand for its product category is causing profit erosion. In the most recent year, ROIC was below the industry average. d. A company in the airline industry with an ROIC recorded above 25% in each of the last five years - correct answer d