BSG Comprehensive Exam (Fall 2019), Answered

BSG Comprehensive Exam (Fall 2019), Answered The benefits of pursuing a strategy of social responsibility and corporate citizenship include · 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 · 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 · 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 · 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? · 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 · 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%. · 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? · 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 · 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? · 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? · 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 · 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? · 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? · 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 · 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 One of the benefits of contracting with celebrities to endorse the company's brand of athletic footwear is · The assist that celebrity endorsement provides in increasing a company's sales and market share of branded footwear Which one of the following is NOT a way to reduce costs and strive to achieve a competitive advantage based on lower overall costs per pair sold than rival companies? Avoiding the use of overtime at the company's plants Which one of the following is IS a way to reduce costs and strive to achieve a competitive advantage based on lower overall costs per pair sold than rival companies? · Searching for the lowest cost way to achieve the target S/Q rating · Spending (but also taking care not to overspend) on best practices training for workers in all of the companies' plants · Striving to operate at full production capacity so as to help spread fixed costs over more pairs of footwear. · Investing in one or more plant upgrades that have the effect of lowering manufacturing costs per pair produced It is reasonable for a company's management team to abandon efforts to win contract to supply private label footwear to chain retailers in a given year when. · It believes the company has good prospect to profitably sell all the branded pairs it can produce at its existing plants (including full use of overtime) Which of the following is a valid reason or strong signal that a company should consider changing from a low-cost/low price strategy to a different strategy? · The low-price segment for branded footwear becomes so overcrowded with competitors that fierce competition makes it very difficult to earn attractive profits in the low-price end of the branded footwear marketplace Which of the following is most likely to be an effective or attractive way to try to reduce manufacturing costs per pair produced at a particular plant? Investing in one or more plant upgrades Which of the following options is usually an appealing way to try to increase a company's ROE? · Pursuing actions to boost the company's total profits and maintaining a high (above 75% payout ratio Which of the following results from the latest decision round are least important in providing guidance to company managers in making their strategic moves and decision to improve their company's competiveness and ranking among the top-performing companies in the upcoming decision round? · The dividend data, the credit rating data, the income statement data, and the balance sheet data for each company that are part of the Financial Performance Summary on p. 5 of the FIR Managers are well-advised to consider whether the company can operate more profitably by selling some/all plant capacity in one or more geographic regions where · Global demand for branded and private-label footwear is so fare below global plant capacity that it will be impossible for most all companies to profitably operate their plants at full capacity for many years to come. A company cannot effectively differentiate its branded footwear from the brands of rivals by · Spending more money on corporate social responsibility and citizenship activities than most all other rivals If a company has an unappealing low branded market share in north America because it is being outcompeted by various rival companies, then company manager should · Immediately review the company's competitive weaknesses in north America as shown at the bottom of the competitive intelligence report and explore the merits of action to correct most or all of them: in addition, they should take actions that they believe will result in the company having at least two important competitive strengths vis-à-vis its north American rivals in the upcoming decision round Flawed ways to pursue a differentiation strategy include · Striving only to achieve weak differentiation (as opposed to strong differentiation) from the branded footwear offerings of other companies also pursuing a differentiation strategy A company's strategy to be a low-cost provider of branded footwear can fail to produce good company performance when · Managers do not operate the company's plants cost efficiently and achieve manufacturing costs per branded pair sold that is no equal to the industry low in each geographic region are at least close to the industry low in each geographic region