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
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
