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Quiz 1 Answers - P1 QUIZ 1 1. A camera-maker's price competitiveness in a particular geographic region is determined by - whether the average wholesale price it camera retailers for its camera models is within $20 of the regional average wholesale price; all companies with average wholesale prices within $20 of the regional average wholesale price are considered to be price competitive. All other companies are considered to be charging average wholesale prices that are NOT price competitive. -whether the average wholesale price for its camera models is within 10% of the lowest-priced camera brand in the region: a company becomes progressively less price competitive the greater its average wholesale price is more than 10% above the company with the lowest average wholesale price. -how favorably the average wholesale price it is charging camera retailers for its models compares to the lowest average wholesale price being charged by a rival camera-maker in that same geographic region. -how much its average wholesale price to camera retailers in the region is above or below the regional average wholesale price. -whether the average wholesale price it is charging camera retailers for its models is at least 10% below the highest-priced camera brand in the region: all companies whose average wholesale price is more than 10% below the highest-priced camera brand in the region are considered to be price competitive .

2. Which of the following does NOT accurately describe your company's camera/drone business and operations? -The company has two buildings for assembling products at its Taiwan site--one for cameras

and one for drones (the drone assembly process also includes assembly of an action-camera model having features and specifications suitable for use in camera-equipped drones). No camera models or drone models are assembled in advance, warehoused in company facilities, and then used to fill incoming orders. -The unmanned aerial view (UAV) drones assembled at the Taiwan plant are sold directly to buyers at the company's website and to other online retailers of commercial drones in each geographic region. -The company makes the majority of the needed camera components at facilities close to its Taiwan assembly plant; newly-produced camera components are transferred by truck on a just-in-time basis to the company's camera assembly facilities where the company operates a 250-person assembly line capable of turning out 3,250 cameras per hour. There is ample space at the camera assembly facility to add two more 250person assembly lines should they be needed later to fill incoming buyer orders. -Your company maintains regional facilities in Milan, Italy: Singapore; Sao Paulo. Brazil: and Dallas. Texas to handle the company's marketing efforts in each of the world's principal geographic regions, to support the merchandising efforts of area retailers who stock the company's brand of action-capture cameras and UAV drones, and to process camera/drone warranty claims (including making needed repairs) originating in their respective geographic regions. -Once the company's action-capture cameras are assembled and tested. the company ships them across the world to multi-store chains and online retailers that sell electronics products and to a wide variety of local retail shops stocking and merchandising (or sometimes renting) action-capture cameras to their customers.

3. The benefits of current and cumulative expenditures for camera/drone product R&D do NOT

include which of the following? -Providing a pipeline of tested ways to add more features, improve product performance. and build the company's proficiencies in introducing new and improved camera/drone designs and models -Reducing the costs of camera/drone parts, components, accessories. and enhancement features; the size of this benefit varies according to the amount spent Boosting a company's P/Q ratings (the size of this benefit varies with the current and cumulative amounts spent and shows up in the P/Q ratings at the beginning of the following year) -Reducing annual maintenance costs for installed camera/drone workstations (this benefit show up at the beginning of the following year) -Increasing the productivity of PATs in assembling camera/drone models (because of easier to assemble product designs); the size of this benefit occurs immediately and varies according to the amount spent

4. Which one of the following is NOT a factor in determining a company's action camera sales and market share in a particular geographic region? -The number of camera models in each company's line-up of camera offerings, the length of the warranty period for each company's camera models. and the amount companies spend for advertising. -How a company's average wholesale price for the camera models it sells to retailers in the region compares with the average wholesale prices of the camera models of competing companies -The extent to which the number of week-long camera sales promotions a company has annually is above/below the region's all-company average

-The amounts by which the company's credit rating and customer service rating are above/below the regional average -Whether the size of the discounts off the regular average wholesale price a company offers to retailers during weekly sales promotion campaigns is above/below the regional average

5. Which of the following are components of the compensation package for members of camera/drone PATs? -Annual base wage, assembly quality incentives ($ per unit assembled divided equally among PAT members), year-end bonus for perfect attendance, and the dollar-cost of a PAT member's fringe benefit package -Weekly salary, the cost of a PAT member's fringe benefits package, weekly bonuses for meeting or beating the PAT's weekly assembly quota. overtime pay, and a monthly allowance for living expenses -The hourly wage paid each PAT member (which can differ for camera PATs and drone PATs i. the costs of a PAT member's fringe benefit package, overtime pay, and a weekly allowance for cost of living expenses -the daily wage paid to each PAT member, the costs of company-paid fringe benefits. a bonus of $4.00 per camera/drone assembled by each camera/drone PAT (which is subject to change), and a weekly allowance for living costs -Monthly salary. the cost of a PAT's fringe benefits package, year-end awards of 10 shares of common stock for perfect attendance. weekly bonuses for meeting or beating the PAT's weekly assembly quota, and a monthly allowance for living expenses

6. Which of the following currencies are NOT involved in affecting the revenues your company receives on shipments of action-cameras and UAV drones to buyers in the four geographic

regions where it competes? -U.S. dollars and euros -The Brazilian real and Taiwan dollars -U.S. dollars and Taiwan dollars -The Japanese yen and the Mexican peso -Singapore dollars and euros

7. The Global Community Bank. under terms of its long-term banking agreement with the company, has agreed to lend the company additional monies should you elect to use debt to help finance growth and other financial needs; the interest rate the GCB will charge on such loans is determined is tied to the payback period (1-year, 5-years, 10-years) and to -the company's debt-assets ratio and gross profit margin. -the company's net profit margin. -4 the company's credit rating and the going rates of interest in world financial markets, -how many consecutive years the company has been profitable and its interest coverage ratio. -the company's balance sheet strength.

8. The factors that affect the productivity of both camera PATs and drone PATs include -perfect attendance bonuses, the percentage use of overtime. the percentage of newly-hired PATs, and how well total compensation levels (not including overtime pay) for camera/drone PATs compare against the camera/drone all-company averages. -the amount of overtime pay that camera/drone PAT members receive, warranty claim rates, camera/drone P/C) ratings. and how the total compensation packages (not including overtime pay) of PAT members compare to the all-company average compensation levels. -the warranty claim rate. the amount of overtime pay each PAT member receives, the total

number of cameras/drones that have to be assembled each year. the amount a company spends annually per camera/drone PAT on training and productivity-enhancing assembly methods, and the number of camera/drone components that PAT members have to assemble. -the size of assembly quality incentives paid to camera/drone PATs, how favorably the overall size of a company's total compensation package (not including overtime pay) per camera/drone PAT member compares against the camera/drone all-company averages, and changes in the number of camera/drone models that have to be assembled. -the complexity of the camera/drone designs. the size of the weekly bonuses paid to PAT members for exceeding the weekly assembly quota, the number of different models that have to be assembled, and the number of components that are used in assembling each camera/drone.

9. Worldwide unit sales of wearable, miniature action-capture cameras are reliably projected to grow -20% annually for Years 6-10, and then slow gradually to 10% annually by Year15. - 6-8% annually during Years 6-10 and then to grow at a slower 4-6% annual rate during the following five years (Years 11-15). -at rates that increase 1% each year, starting from 6% in Year 6 and rising to 15% by Year 15. -at 10-12% annually during the Year 6-Year 10 period and at 7-9% annually during the Year 11-Year 15 period -at annual rates slowly declining from 15% in Year 6 down to 5% in Year 15.

10. Which of the following are the four geographic regions in which the company is currently selling its action cameras and UAV drones? -The United States, Western Europe, Australia-New Zealand. and Southeast Asia -Europe-Africa, Latin America, Asia-Pacific, and North America -Western Europe. Asia, North America. and South America -Latin America. the European Union, China. and North America -The European Union. North America, Southeast Asia. and Latin America

11. Which of the following is NOT included among the five measures on which a company's performance is judged/scored? -Earnings per share -Revenues and customer satisfaction -Latest stock price -Credit rating and ROE -Image rating

12. The factors that affect the P/Q rating of a company's action cameras include the percentage of the action cameras that it sells which are outsourced from contract assemblers in Taiwan or mainland China. -the prices it pays suppliers of materials and components used in its action-capture cameras and the quality ratings of these materials and components. -the average wholesale price it charges camera retailers for its models, the quality and durability of the camera housing, and the number of extra performance features designed into its cameras.

-image sensor size, the size of the LCD display screen, the image quality of the videos and still pictures, and the number of photo modes for videos and still pictures. -the size of assembly quality incentives it pays to camera PAT members, warranty claim rates, and the age of camera assembly workstations.

13. The company has its camera and drone assembly facilities in -China. -Japan. -Brazil. -Mexico. -Taiwan.

14. Which of the following statements about your company's assembly operations for cameras and drones is false? -The capital costs of new workstations and facilities expansions are paid in full in the year they occur. -Cameras are assembled by 4-person PATs, while drones are assembled by 5-person PATs due to the added number of components and more complicated assembly methods. -All of the company's capital expenditures for fixed assets (facilities, workstations. robotics upgrades, office equipment, and furnishings) at the Taiwan plant site are depreciated over 20 years at the rate of 5% annually. -The manufacturers of robots have recently developed small robots capable of performing some of the tasks/work steps in assembling both action cameras and UAV drones: installing one of these robots at each camera/drone workstation enables the size of PATs to be cut by

one person. -The maximum number of cameras/drones that can be assembled at overtime is 20% of the number of cameras/drones that a camera/drone PAT assembles each year.

15. Which of the following statements about crafting a strategy to be competitively successful in the markets for action cameras and drones is true? -The strategy and competitive approach that most frequently produces good-to-excellent overall company performance involves striving to be exceptionally cost efficient and pursuing a competitive advantage keyed to operating more cost-efficiently than rivals. thereby being in a strong position to profitably sell action cameras and UAV drones at prices below those of rivals. -So long as a company is profitable. there is no compelling need for its managers to make changes or adjustments in the company's strategy and competitive actions/efforts in response to the shifting strategies and competitive efforts of rival companies that are actively striving to improve their overall performance. -Because GLO-BUS has no built-in bias that favors any one strategy or approach to competing over all the others, there are multiple strategic approaches and sets of competitive efforts/actions that, if properly designed and well-executed are capable of producing competitive success in the global market for cameras/drones, provided they are not overpowered or thwarted by even more potent strategic approaches and competitive actions/efforts that are well-executed by rival companies.. -Whether a company is operating cost efficiently is not especially important to a company's competitive success or profitability. so long as its sales/market shares of cameras/drones in the 4 geographic regions are above the industry averages. -What really drives the sales/market share success/failure of any one company's strategy for

competing in the marketplace is whether its prices in the 4 geographic regions are below the industry averages and its P/Q ratings are well above the industry averages in all 4 regions.

16. Which of the following is NOT accurate as concerns the retailers and buyers of action-capture cameras? - Retailers in any geographic region can order action cameras one business day and receive them five business days later. -Each of the four major geographic regions of the world market has 12,500 retailers of actioncapture cameras, some of which are multi-store retail chains (100 per region), online -electronics retailers (400 per region), and local retail enterprises that sell or rent these cameras (12,000 per region). -Retailers typically carry anywhere from 2-4 brands of action-capture cameras and stock only certain models of the brands they do carry, but in all four geographic markets there are around 20 “full-line” action camera retailers that stock most all brands and models. -Many price-sensitive consumers shopping for their first action-capture camera are inclined to wait to make a purchase until retailers in their area have weekly sales promotions featuring discounted prices. -People interested in purchasing a wearable action camera in order to record their action adventures for personal viewing and also to share their experiences with others (perhaps on Facebook or other sites) are generally quite aware that there are often big differences in the prices and performance of various camera brands and a big majority do extensive Internet research to educate themselves about the features. Performance. And prices of different action-capture camera brands and models.

17. The factors that affect a company’s P/Q rating for UAV drones do NOT include -the amount a company spends on training its drone-related PATs and improving its dronerelated assembly methods. -the caliber of the built-in action-capture camera. -a company's cumulative spending on product R&D. -0 the number of suppliers the company utilizes for its purchaser components. -the caliber of the obstacle sensors.

18. Which of the following is NOT accurate as concerns the online retailers of unmanned aerial view drones and/or the buyers of unmanned aerial view drones? -It is easy and common for likely drone purchasers to do considerable comparison shopping before making a decision about which drone brand to buy -Both drone-makers and 3rd-party online electronics retailers of drones have extensive information on their websites about the currently available models they offer for sale. -The purchasers of drones in Latin America and the Asia-Pacific regions are less sensitive to cross-brand price differences than are drone purchasers in North America and Europe-Africa; rather, the biggest factor affecting their purchase decisions are the P/0 rating of the various brands of UAV drones.. -Potential buyers pay at least some attention to the search engine advertising they encounter when browsing for information about UAV drones, and their decisions to ultimately purchase this or that brand are affected by these ads. -The vast majority of drone shoppers consider the widely-available and much-publicized annual P/Q ratings compiled by the Global Alliance for Safe and Responsible Use of Commercial Drones to be a trusted measure of the performance and quality of competing brands of drones.

19. Which of the following is one of the factors that determine a company's credit rating? -Its debt-to-equity ratio -The company's average return on shareholders' equity over the most recent three years -A company's earnings per share -Whether the company has the ability to pay off all outstanding loans within 5 years -The percentage of the net income the company allocates in the prior two years to paying back loans outstanding

20. Which of the following statements does NOT accurately describe how your company's performance is scored on the Investor Expectations Standard? -Exactly meeting each of the 5 performance targets results in an Investor Expectation Score of 100. -Meeting each expected performance target is worth some number of points based on the scoring weight your instructor selected; for example, if the scoring weight for EPS is 20% or 20 points, meeting the EPS target earns a score of 20 on the EPS performance measure. -There is a Game-to-Date or "all-years" Investor Expectation Score that measures your company's success in achieving or exceeding the five expected performance targets over all years of the exercise completed so far. -The investor expectations standard for scoring your company's performance is based on your company's success in meeting or beating each year's expected performance targets for EPS. return on equity or ROE, credit rating, image rating, and stock price appreciation. -Beating one of the five investor expectations targets results in a bonus award of 1% for each 1% the annual target is exceeded (up to a maximum bonus of 40%); thus, if achieving the EPS target is worth 20 points, a company can earn a score of 28 points by beating the annual EPS target by 40% or more....