BSG Comprehensive Exam 2024-2025: Newest Complete Questions, Expert-Verified Answers, Exams of Business Economics

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BSG Comprehensive Exam 2024-2025: Newest

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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 - CORRECT ANS- - · 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 - CORRECT ANS- - · 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) The benefits of pursuing a strategy of social responsibility and corporate citizenship include

• CORRECT ANS- - · 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 A company stands a better chance of achieving a sustainable cost-based competitive advantage over rivals if its managers - CORRECT ANS- - · 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? - CORRECT ANS- - · 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 - CORRECT ANS- - · 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%. - CORRECT ANS- - · 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. o Labor cost per pair = Compensation/Productivity o Labor cost per pair initially = 20,000/3,200 = $6. o After increase in productivity = 20,000/ (3,200*1.25) = $5. o Reduction = 6.25 * 5.00 = $1. 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? - CORRECT ANS- - · Offering 400 or more models/styles to buyers

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 - CORRECT ANS- - · 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? - CORRECT ANS- - · 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? - CORRECT ANS- - · 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 - CORRECT ANS- - · 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 - CORRECT ANS- - · 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? - CORRECT ANS- - 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? - CORRECT ANS- - · 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. - CORRECT ANS- - · 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? - CORRECT ANS- - · 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? - CORRECT ANS- - Investing in one or more plant upgrades

A company's strategy to be a low-cost provider of branded footwear can fail to produce good company performance when - CORRECT ANS- - · 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 In which one of the following instances do the industry low, industry average, and industry high values for the cost benchmarking data in each issue of the FIR signal that one or more elements of a company's costs are likely to be too high relative to those of rival companies?

• CORRECT ANS- - · When the company's operating profit per pair sold in the internet and wholesale segments are the lowest in the industry of all four geographic regions Which of the following action sis unlikely to help boost a company's market share in all four geographic regions? - CORRECT ANS- - · Pursuing efforts to boost labor productivity at each of the company's plants. Which of the following actions is LEAST likely to increase labor productivity by an amount that is large enough to result in lower labor costs per pair produced at a particular plant? - CORRECT ANS- - · Increasing worker base pay by the allowed maximum of 15% each and every year until the company's base pay compensation per employee exceeds the total compensation per employee ($/year) of all other companies in the industry The plant upgrade option that reduces production run setup costs by 50% each year and costs $8 million per million pairs of plant capacity (which causes depreciation costs at the plant to rise by 5% of the capital cost of the upgrade) merits immediate consideration by company managers when - CORRECT ANS- - · The company has a new 1 million-pair plant in Europe-Arica ready to go into production in Year 14 and the company's strategy calls for this plant to produced 500 models/styles (which entails annual production run setup costs of $14 million) every year through year 20. The industry low, industry average, and industry high benchmarks for the costs per branded pair sold in each geographic region (including manufacturing costs, shipping, import tariffs, and exchange rate adjustments), warehouse expenses pe branded pair sold, marketing

expenses per branded pair sold, and administration expenses per branded pair sold that appear in each issue of the footwear industry report - CORRECT ANS- - · Are worth careful scrutiny by the managers of all companies because when the benchmarking data signals that a company's costs for one or more of the benchmarks are out of line, managers are well advised to take corrective action in the next decision round. While contracting with celebrities to endorse a company's brand adds to the competitive power of its product offering vis-à-vis the offerings of rivals - CORRECT ANS- - · One of the big risks of bidding to win contracts for celebrity endorsements is that it is easy to end up overspending to win a contract because it is so hard to judge just how big the actual benefit (of value) of winning the contract for a particular celebrity will prove to be. Company managers should give strong consideration to bidding for private label contracts in one or more geographic regions in the upcoming decision round when - CORRECT ANS- - · They expect to have idle production capacity at one or more plants after producing all the branded pairs needed to meet anticipated demand in the upcoming year Which one of the following does NTO help boost a company's image rating? - CORRECT ANS- - · Paying total compensation to plant employees that is below the industry average What DOES help boost a company's image rating - CORRECT ANS- - · Reducing the price, the company charges for its branded footwear · Sustained spending for social responsibility and corporate citizenship initiatives · Being successful in winning celebrity endorsement contracts and thereby boosting the company's celebrity appeal ratings · Raising advertising to levels above the industry average in each geographic region

· A decline in the company's debt to asset ration from 0.30 to 0. · An increase in the company's default risk ration from 5.0 to 10. · A change in the company's default risk rating from medium to low Which on of the following is a way to improve the S/Q rating of branded pairs produced at a particular plant - CORRECT ANS- - · Increasing expenditures for TQM/Six Sigma Programs A dependable and appealing way for managers to try and boost their company's EPS is to - CORRECT ANS- - · Achieve a sizable cost based competitive advantage over rivals that company managers are savvy enough to sustain; as the market demand for branded footwear grows and the company exploits its cost advantage by underpricing most/all rivals in all four geographic regions, the resulting sales volume and revenue gains will typically spur increases in EPS Brinker International operates restaurants in several different segments of the casual dining market. This is - CORRECT ANS- - an example of product diversification. On the most basic level, corporate-level strategy is concerned with ____ and how to manage these businesses. - CORRECT ANS- - what product markets and businesses the firm should be in Which acquisition would be considered the LEAST related? - CORRECT ANS- - an upscale "white-tablecloth" restaurant chain acquires a travel agency The more "constrained" the relatedness of diversification, - CORRECT ANS- - the more links there are among the businesses owned by an organization.

Which of the following is NOT a limit to vertical integration? - CORRECT ANS- - imitation of core technology by potential competitors What is a limit to vertical integration? - CORRECT ANS- - bureaucratic costs the loss of flexibility through investment in specific technologies capacity balance and coordination problems from changes in demand Horizontal acquisitions in the video rental industry are typically intended to - CORRECT ANS- - reduce some of the overcapacity in the industry. Foreign firms seeking to acquire U.S. firms are interested in all of the following EXCEPT - CORRECT ANS- - acquiring relationships with dealers through horizontal acquisitions. When a foreign firm seeks to acquire U.S. firms they are interested in - CORRECT ANS- - gaining access to the U.S. company brand names. gaining access to critical resources held by U.S. companies. diversifying into unrelated industries in order to broaden their market scope. Researchers have found that shareholders of acquired firms often - CORRECT ANS- - earn above-average returns.

customization due to cultural differences government pressure for firms to use local sources for procurement The choices that a firm has for entering the international market include all of the following EXCEPT: - CORRECT ANS- - leasing. The choices that a firm has for entering the international market include - CORRECT ANS- - exporting. licensing. acquisition. Firms participate in strategic alliances for all the following reasons EXCEPT to - CORRECT ANS- - retain tight control over intangible core competencies Firms participate in strategic alliances for? - CORRECT ANS- - enter markets more quickly. acquire technology. create values they could not develop acting independently. When using business-level and corporate-level cooperative strategies, a firm's primary intent is to develop strategic alliances that - CORRECT ANS- - create a competitive advantage.

In a(an) ____ the firms involved own equal shares of a newly-created venture. - CORRECT ANS- - joint venture A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. This is an example of the advantage of ____ resulting from an alliance. - CORRECT ANS- - economies of scale. Firms entering into synergistic strategic alliances expect to attain - CORRECT ANS- - economies of scope. The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. The team members are becoming concerned about the security of their jobs at Sierra Infusion. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for - CORRECT ANS- - increased diversification of Sierra Infusion. The separation between firm ownership and management creates a(n) ____ relationship. - CORRECT ANS- - agency A primary objective of corporate governance is to - CORRECT ANS- - ensure that the interests of top-level managers are aligned with the interests of shareholders. Which of the following is NOT an internal governance mechanism? - CORRECT ANS- - the market for corporate control What is an internal governance mechanism - CORRECT ANS- - the board of directors ownership concentration

What is internal governance mechanism - CORRECT ANS- - the board of directors ownership concentration executive compensation The separation between firm ownership and management creates a(n) ____ relationship. - CORRECT ANS- - agency Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. - CORRECT ANS- - 5 A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. - CORRECT ANS- - reduce their employment risk, increase the company's value Managerial employment risk is the - CORRECT ANS- - managers' risk of job loss, loss of compensation, and/or loss of reputation The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. The team members are becoming concerned about the security of their jobs at Sierra Infusion. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for - CORRECT ANS- - increased diversification of Sierra Infusion. The market for corporate control serves as a means of governance when - CORRECT ANS- - internal controls have failed.

Corporate governance is all of the following EXCEPT - CORRECT ANS- - resolve conflicts among corporate employees. Corporate governance is - CORRECT ANS- - mechanisms used to determine and control the strategic direction and performance of organizations. a means to establish and maintain harmony between owners and top managers whose interests may conflict. ensuring that top managers' interests are aligned with the interests of stockholders. T or F? Collusion is a form of cooperative strategy. - CORRECT ANS- - T T or F? Firms who are competitors can form cooperative strategies - CORRECT ANS- - T T or F? If a large Asian cosmetics firm was to engage in a 50-50 partnership with a large American chemical company to form a new company focused on creating advanced skin care products, this would be considered a joint venture. - CORRECT ANS- - T T or F? Strategic alliances are cooperative strategies between firms that combine their resources and capabilities to create a competitive advantage - CORRECT ANS- - T T or F? Being (and having) a trustworthy partner increases the probability of alliance success - CORRECT ANS- - T T or F? Equity strategic alliances exist when one firm acquire another firm - CORRECT ANS-

• F

. Moving into international markets is a particularly attractive strategy to firms whose domestic markets: - CORRECT ANS- - are limited in opportunities for growth. Factors of production in Porter's model of international competitive advantage include all of the following EXCEPT: - CORRECT ANS- - quality of demand. Factors of production in Porters model of international competitive advantage include - CORRECT ANS- - labor. capital. infrastructure. In France, fine dressmaking and tailoring have been a tradition predating Queen Marie Antoinette. Cloth manufacturers, design schools, craft apprenticeship programs, modeling agencies, and so forth, all exist to supply the clothing industry. This is an example of the __________ in Porter's model. - CORRECT ANS- - related and supporting industries All of the following are international corporate-level strategies EXCEPT the ___________ strategy. - CORRECT ANS- - differentiation All of the following are international corporate level strategies - CORRECT ANS- - multidomestic global transnational

A multidomestic corporate-level strategy is one in which: - CORRECT ANS- - strategic and operating decisions are decentralized to the strategic business unit in each country A global corporate-level strategy assumes: - CORRECT ANS- - more standardization of products across country markets. The choices that a firm has for entering the international market include all of the following EXCEPT: - CORRECT ANS- - leasing The choices that a firm has for entering the international market include - CORRECT ANS- - exporting. licensing. aquisition Which of the following is NOT a disadvantage associated with exporting? - CORRECT ANS- - high costs associated with acquiring foreign production facilities What is a disadvantage associated with exporting - CORRECT ANS- - high transportation costs loss of control over distribution activities tariffs imposed by local governments A licensing agreement: - CORRECT ANS- - allows a foreign firm to purchase the rights to manufacture and sell a firm's products within a host country.