MGMT 408 Exam 1 | Questions with Verified Answers

MGMT 408 Exam 1 | Questions with Verified Answers Which of the following statements about the average wholesale price a company charges footwear retailers in a given geographic region is incorrect? So long as a company has a big price based competitive advantage in a region's wholesale segment, it has the ability to achieve an attractively large sales volume and market share even if it suffers from competitive disadvantages on other competitively relevant factors The three competitive factors that impact only internet sales and market share in a region include expenditures for search engine advertising Which of the following most accurately describes your company's production operations? Standard and superior materials are sourced from outside suppliers at base prices that are currently $6 per pair for 100% use of standard materials and $12 per pair for 100% use of superior materials; however these base prices can vary up or down according to the strength of global demand for footwear materials and the global percentage usage of standard versus superior materials Which of the following statements about the impact of a company's competitive efforts in a region on its regional market share and number of branded pairs sold is false? The biggest possible competitive advantage a company can achieve in a given region's internet segment is to offer free shipping and thereby capture the biggest number of pairs sold and the biggest market share of any company in that region's internet segment Buyer demand for branded athletic footwear is projected to grow 9-11% annually in Latin America and the Asia-Pacific during the Year 11-Year 15 period Which of the following currencies are involved in causing favorable or unfavorable exchange rate adjustments to your company's costs and revenues? Singapore dollars, euros, and Brazilian reals Which of the following is the most important competitive factor in determining a company's ability to secure contracts to supply large multi-outlet retailers private-label footwear to chain retailers in a particular geographic region? the price at which the company offers to supply the retailers with private-label pairs The factors that affect the reject rates at the company's footwear production facilities include the size of the incentive payment per non-defective pair produced, expenditures for best practices training per worker, spending for TQM/Six Sigma quality control efforts, and the percentage use of new equipment versus refurbished equipment Which of the following is/are not among the factors that affect worker productivity? the S/Q ratings of the footwear being produced and whether the percentage use of superior materials exceeds 60% Which of the following statements about the importance of each competitive factor in determining company sales volumes and market shares in a particular geographic region is false? tiny cross-company differences in competitive effort on a highly influential competitive factor (like S/Q ratings, the number of models/styles offered, and selling prices) nearly always have a bigger impact on company sales/market share outcomes in a region than do large differences on less influential competitive factors The company currently has production facilities to make athletic footwear in Asia-Pacific and North America The factors that affect a company's S/Q rating by the International Footwear Federation include a company's current and cumulative spending for TQM/Six Sigma quality control programs; whether production improvement option C has been installed (this option entails investing in special production equipment that boosts the S/Q rating of all pairs produced by 1.0 star) and expenditures for new styling features per model The interest rate a company pays on 1-year, 5-year, and 10-year loans is a function of its credit rating and the length of time over repayment is scheduled to occur (1-year, 5-year, or 10-years) Which of the following are components of the total compensation package for production workers at your company's production facilities? Base wages, incentive payments per non-defective pair produced, fringe benefits and any overtime pay Which of the following is not among the 13 competitive factors that determine a particular company's unit sales and market share of branded footwear in a particular geographic region? The length of the warranty against materials defects that the company offers buyers (30 days, 60 days, 1 year) Which of the following are factors in determining a company's credit rating? The percentage by which prior year cash flow from operations covers a company's prior year interest payments, the company's debt-asset ration, its dividend payout ratio, and its default risk ratio The company's shipments of newly-produced, branded and private-label footwear from its plants to its regional distribution centers are subject to any applicable import tariff and exchange rate adjustments Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true? in managing production worker compensation and expenditures for best practice training, the overriding objective of company managers should be to achieve the lowest feasible labor costs per pair produced at each production facility In the private-label benchmarks section, the industry-low, industry-average, and industry-high benchmarks for the margins over direct costs should be interpreted as representing how much sellers of private-label footwear received over and above the costs per pair sold; these margins, if positive, serve to improve a seller's operating profits in the designated region (negative margins over direct cost act to reduce a seller's operating profits in the region) The production cost benchmarks reported on p. 6 of each issue of the Footwear Industry Report always merit close examination because they enable company managers to check whether certain aspects of the production operations at their company's production facilities are competitive with the production outcomes at other production facilities in the same region The most attractive way to reduce or eliminate the impact of paying tariffs on pairs imported to a company's distribution warehouse in Latin America is to build production facilities in Latin America and then expand its capacity as may be needed so that the production facility has the capability to supply all of the branded and private-label pairs the company intends to try to sell in Latin America Based on the industry-low, industry average, and industry-high values, which one of the following would correctly indicate that one or more elements of your company's costs are too high compared to those of rival companies? Your company's operating profit margin in the Wholesale segment of the North America region is only 5% about the industry low If a company wants to enhance the profitability of differentiating its branded product offering from rivals by offering buyers 500 models/styles to choose from in all four regions, then it should consider reducing the $15 million annual costs for production run setup costs associated with producing 500 models/styles at each of its production facilities by instituting production improvement option B at each of its production facilities Which one of the following is the most effective means for a company to grow its wholesale sales of branded footwear in the Latin America region? market branded footwear to Latin American retailers that has an S/Q rating 1.5 stars higher than the industry average S/Q rating in Latin America Pursuing a strategy of social responsibility and corporate citizenship has a positive impact on a company's image rating, provided company spending on socially responsible activities is a meaningful amount and is sustained over a multi-year period The most important/essential results from the latest decision round that company managers need to review/study in order to guide their strategic moves and decisions to improve their company's overall performance and competitiveness vis-à-vis rivals in the upcoming decision round are the Comparative Competitive Efforts section of the Competitive Intelligence Report for each of the four geographic regions Which of the following are effective ways for managers to try to boost a company's stock price? Repurchase shares of common stock and aggressively pursue efforts to achieve annual increases in earnings per share that meet or neat investor expectations If a company spends $14.4 million to install refurbished footwear-making equipment with capacity to produce 1 million pairs of athletic footwear at its North American production facility, then its annual depreciation costs at that facility will rise by 10% or $1,440,000 Which one of the following actions is most likely to result in higher production costs per branded pair at one of your company's production facilities? increasing the S/Q rating of branded pairs from 4.5 stars to 5.5 stars Under what circumstances should a company's management team give serious consideration to making an offer to supply private-label footwear to chain retailers in a particular geographic region? When managers determine that all of the company's available production capacity will not be needed to produce branded footwear and that the total amount of idle production capacity at its production facilities will be sufficient to meet or exceed the 100,000 pair minimum delivery requirement of chain retailers in each region Which one of the following helps increase the S/Q rating of branded pairs produced at a particular production location? Increasing expenditures for enhanced styling/features A company uses outside suppliers to provide services that it could perform itself. (e.g. a firm might contract a professional cleaning company to come in on a regular basis to clean offices.) Outsourcing When a shoe manufacturer opens a company-owned retail store, it is an example of forward vertical integration Marketing efforts to increase sales of existing products in existing markets is which concentration (intensive) grand strategy? market penetration Exporting products made in the US to new foreign markets is a basic example of which concentration (intensive) strategy? market development Which generic strategy is usually associated with the discount retailers such as Wal-Mart? cost leadership strategy A generic strategy aimed at emphasizing the uniqueness or superiority of products and services is_? differentiation strategy A sign in a store window reads, "going out of business—everything must go" is probably an example of which grand strategy? Liquidation If Microsoft bought a chain of food retailers such as Piggly-Wiggly, it would be an example of a __. conglomerate diversification Sony's launches of PlayStation 2, then PS3, then PS4, is an example of which concentration (intensive) strategy? product development If Dell Computer were to acquire Intel, it would best be described as an example of ______. backward vertical integration "Given the business (es) we are in, how should we compete?" is the question asked at the ____ level. competitive (business) strategy The sale of one of a firm's SBUs to a competitor, and that SBU continues to operate is a _______. Divestiture The name given to Michael Porter's group of strategies used at the competitive (business) strategy level. generic strategies Dell Computer's initial decision to start selling LCD wide-screen TVs is an example of _______. related diversification If a company builds a new manufacturing plant dedicated to producing shoes for a region, and later decides to get out of that region but can't find a buyer for the plant, the manufacturing plant might be viewed as a (an) _____. exit barrier Difficulties encountered by trying to "reposition" a brand in the market (e.g. moving "upscale") are examples of a (an) _______?. mobility barrier The formation of HP/Compaq and Daimler/Chrysler are examples of which grand strategy? horizontal integration Creating a new, untapped market rather than competing with rivals in an existing market is a (an) _____. blue ocean strategy The "triple bottom line" is an approach to assessing performance that emphasizes concern for: people, planet, and profit A health drink company is known for launching drinks with flavors which are different from what are offered in the market. It regularly indulges in experimentation to come up with new and exotic flavored drinks. It is also able to charge prices that are higher than what other health drink companies charge. What advantage would the company enjoy because of the strategy it follows? It has an ability to obtain premium prices from customers. The internet boom of the 1990s is an example of: Shumpterian Shock A "3 firm concentration ratio of 80%" would mean: The industry is highly concentrated An approach to assessing performance that targets manager's attention on four areas: (1) financial, (2) customer, (3) internal business process, and (4) learning and growth is a tool called _______? balanced scorecard Perceptual (or position) mapping is used to: