dinaella333
Q.6 Which of the following statements about striving to reduce…
Q.6 Which of the following statements about striving to reduce labor costs per pair produced at each of the company’s facilities is true?
Pursuing actions to achieve low labor costs per pair produced at company facilities is important only to those companies striving to be a low-cost/low-price provider of branded athletic footwear; companies pursuing a strategy to offer buyers premium branded footwear at a premium price do not really have to be concerned about having low labor costs per pair produced.
A company cannot achieve labor costs per pair produced that are well below the industry average and close to the lowest in the industry (in each geographic region where it has production facilities) unless its annual total compensation package is considerably below the average total compensation paid by all companies with production facilities in these same regions.
Because of the progressively higher amounts of time it takes to produce branded footwear having a 7-star or higher S/Q rating, it is very difficult for a company producing branded footwear with a S/Q rating of 7-stars or higher to achieve labor costs per pair produced that are significantly below the industry average in those geographic regions where it has production facilities.
All companies, regardless of the strategy being employed, should pursue actions to manage employee compensation and labor productivity in a manner that results in labor costs per pair produced equal to (or very close to) the industry-low in each region where the company has facilities.
A company’s best pathway to achieving low labor costs per branded pair produced is by aggressively pursuing all available options to boost labor productivity to the highest possible level.
Q7. Given the following data from a Comparative Competitive Efforts page in the CIR:
WHOLESALE SEGMENT Your
Company Industry
Average Your Company
vs. Ind. Avg.
Wholesale Price ($ per pair) $43.50 $53.83 -19.2%
S/Q Rating (1 to 10 stars) 4.3 6.3 -31.7%
Model Availability 400 300 +33.3%
Brand Advertising ($000s) 12,000 14,350 -16.4%
Rebate Offer ($ per pair) 0 3.40 -100.0%
Delivery Time (weeks) 3 wks 2.8 wks +7.1%
Retailer Support ($ per outlet) 4,500 4,675 -3.7%
Retail Outlets 770 1,538 -49.9%
Celebrity Appeal 0 111 -100.0%
Brand Reputation (prior-year average) 80 76 +5.3%
Pairs Demanded 2,365 2,413 -2.0%
Gained/Lost (due to stockouts) -7 0
Pairs Sold (000s) 2,358 2,413 -2.3%
Market Share (%) 9.8% 10.0% -0.2 pts
Based on the above data for your company, which of the following statements is false?
Your company’s branded sales volume and market share in the Wholesale segment was negatively impacted by your company’s S/Q rating, brand advertising, celebrity appeal, and lack of a rebate offer.
Your company had a small competitive disadvantage in expenditures for retailer support.
Your company’s two biggest competitive advantages in the Wholesale Segment related to wholesale price and model availability.
Your company’s percentage competitive advantages and disadvantages on the 10 competitive factors affecting Wholesale sales and market share resulted in a net overall competitive disadvantage of a size that resulted in a below-average 9.8% market share.
Your company’s branded sales volume and market share in the Wholesale segment was positively impacted by your company’s delivery time.
Q8. Assume a company’s Income Statement for Year 12 is as follows:
Income Statement Data Year 12
(in 000s)
Net Revenues from Footwear Sales $ 560,000
Cost of Pairs Sold 340,000
Warehouse Expenses 45,000
Marketing Expenses 85,000
Administrative Expenses 15,000
Operating Profit (Loss) 75,000
Interest Income (Expense) (25,000)
Pre-tax Profit (Loss) 50,000
Income Taxes 15,000
Net Profit (Loss) $ 35,000
Based on the above income statement data and assuming the company has 20 million shares of common stock outstanding, the company’s operating profit margin and EPS were
10.38% and $1.75.
13.79% and $2.59.
13.39% and $1.75.
15.7% and $2.25.
13.39% and $3.75.
Q9. 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?
Spend an annual amount for search engine advertising that exceeds the industry average in Latin America by at least $1 million
Provide footwear retailers in Latin America with an amount of merchandising and promotional support that exceeds the industry average in Latin America
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
Charge footwear retailers in Latin America an average wholesale price for branded footwear that is below the average retail price the company charges individuals consumers to buy its branded footwear online at the company’s website in Latin America
Offer a mail-in rebate that is $1 higher than the industry average in Latin America
Q10. 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 beat investor expectations.
Cut the dividend to zero and issue additional shares of stock so as to increase the funds available for quickly paying off all long-term debt (ideally in no more than 2 years); then the company should avoid further use of long-term debt, strive to achieve and maintain a credit rating of A or A+, and declare a dividend each year that equals projected EPS.
Make every effort to achieve a branded market share in each geographic region that is at least equal to the industry average, keep the company’s dividend payout ratio in the range of 50%, and repurchase shares of common stock.
Increase the company’s dividend payments to shareholders each year, keep the company’s credit rating at A (or above), strive to increase the company’s retained earnings each year by a minimum of 5%, and not issue more than 5,000 shares of common stock in any one year.
Spend amounts on corporate citizenship and social responsibility that are above the industry average, boost the company’s dividend payout ratio to more than 100%, charge prices for branded footwear that are below the industry average in each geographic region, and issue sufficient shares of common stock to raise the funds to pay off all long-term debt within 2 years.
