Glo-bus Quiz 2 Flashcards

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Questions and Answers

Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-featured cameras?

Improve customer service

Enhance product features

Lower the price

Increase the number of models in the company's line (correct)

Based on the given income statement data, which of the following statements is false?

Marketing costs are higher than production costs

Operating profit is $14,400

Delivery costs are 2.8% of revenues (correct)

Net income is $9,555

What is one benefit of pursuing a strategy of social responsibility and corporate citizenship?

An enhanced image rating as long as the spending is meaningful and sustained over several years.

Which of the following is NOT an action company co-managers can take to boost a subpar ROE?

Issue additional shares of stock Signup and view all the answers

What is a dependable way for managers to try to boost their company's EPS?

Achieve a differentiation-based competitive advantage in both segments. Signup and view all the answers

What are the benchmarks for camera costs and operating profits worth?

Careful scrutiny by managers. Signup and view all the answers

What will the annual depreciation costs rise by if a company adds 50 new workstations costing $75,000 each?

$550,000 Signup and view all the answers

What are the operating profit margin and net profit margin based on the provided income statement?

26.8% and 17.7% Signup and view all the answers

Which of the following sets of actions are unlikely to help achieve a differentiation-based competitive advantage?

Raise base pay of PAT members by 10% or more Signup and view all the answers

Which one of the following actions does NOT result in higher levels of PAT labor productivity?

Avoiding outside suppliers Signup and view all the answers

Which of the following actions does not help make a company's brand of multi-featured cameras more competitive?

Increase total compensation of PAT members Signup and view all the answers

What should company co-managers consider to improve credit rating?

Issue additional shares and pay down loans. Signup and view all the answers

Based on given financial data, what are the percentages of debt and equity in the capital structure?

32% debt and 68% equity Signup and view all the answers

When is it reasonable for a company to consider shifting away from a strong differentiation strategy?

When the market is crowded with copycat differentiation strategies. Signup and view all the answers

What is the annual compensation cost of a single PAT member and a fully-staffed PAT?

$23,740 and $94,960 Signup and view all the answers

What would the company's EPS for Year 8 be if net income is $40 million?

$4.00 and retain earnings of $25 million. Signup and view all the answers

What is an attractive way to reduce production costs of multi-featured cameras?

Striving to keep labor costs per camera below the industry average. Signup and view all the answers

What should company managers do if they are being outcompeted in the Europe-Africa market?

Explore correcting competitive weaknesses and initiate actions for strengths. Signup and view all the answers

What essential results should company managers review from the latest decision round?

The Quarterly Snapshot data in the Competitive Intelligence Report. Signup and view all the answers

When should managers consider changing from a low-cost strategy for multi-featured cameras?

When competition in low-priced cameras makes it hard to profit. Signup and view all the answers

Study Notes

Multi-Featured Cameras Strategy

To improve a brand's P/Q rating, avoid simply increasing the number of camera models.
A meaningful and sustained investment in socially responsible activities enhances a company's image rating.

Financial Performance Analysis

Recognize delivery costs as 2.8% of revenues, which are the smallest cost component in a company.
Operating profit margin and net profit margin calculated from income statement data are 26.8% and 17.7%, respectively.
Annual depreciation costs increase by $550,000 with the addition of new workstations and plant facilities.

Corporate Financial Strategies

Issuing additional shares to pay down debt is a recommended action to improve corporate credit ratings.
Review industry benchmarks for operating profits and camera costs to identify necessary corrective actions.

Competitive Advantage

Achieving a differentiation-based competitive advantage in both entry-level and multi-featured cameras can lead to increased EPS.
Actions such as raising entry-level camera prices significantly may hinder differentiation strategies.
Avoid increasing PAT member compensation without clear productivity gains to maintain competitive brand appeal.

Operational Efficiency

To enhance PAT labor productivity, consider strategic outsourcing rather than keeping assembly in-house.
Maintaining labor costs below industry averages contributes to a low-cost competitive advantage in production.

Market Competitiveness

Companies must assess competitive weaknesses in the Europe-Africa market and initiate measures to establish significant competitive strengths.
A shift from a low-cost strategy may be necessary when competitors heavily saturate the low-priced segment, limiting profit potential.

Essential Decision-Making Data

Company managers should prioritize analyzing Quarterly Snapshot data in Competitive Intelligence Reports for strategic planning.
Understanding the competitive landscape across various geographic regions is critical for refining strategy and enhancing competitiveness.

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Description

Test your knowledge with this set of flashcards focusing on Glo-bus Quiz 2 topics. This quiz covers strategies for improving brand ratings and analyzing income statements. Perfect for students looking to enhance their understanding of global business simulations.