SP25 STR 1

ACB Systems Inc. and Onyx Systems Inc. are two competing firms. ACB Systems Inc. has $250,000 in tangible assets and $150,000 in intangible assets. Onyx Systems Inc. has $100,000 in tangible assets and $297,000 in intangible assets. In the context of the resource-based view, which of the following is the most likely implication of the asset values of the two companies?

• Onyx Systems Inc. has less valuable resources than ACB Systems Inc.

• ACB Systems Inc. will find it harder than Onyx Systems Inc. to attain competitive advantage.

• Onyx Systems Inc. has less invisible assets than ACB Systems Inc.

• ACB Systems Inc. will find it easier than Onyx Systems Inc. to sustain competitive advantage.

For a firm to sustain its competitive advantage, any fit between its internal strengths and the external environment must be _____.

• dynamic

• static

• valuable

• permanent

Assume your CESIM firm’s return on equity (ROE) dropped from 19.76% in Year 1 to 12.35% in Year 2. Upon further analysis, you find that net profit margin decreased from 8% to 5%, asset turnover remained constant at 1.9, and financial leverage remained constant at 1.3. Which of the following best explains the decline in ROE?

• The company’s profitability declined.

• The company’s asset efficiency worsened.

• The company took on more debt.

• The company’s return on assets increased.

• The company’s market share significantly decreased.

Assuming your CESIM firm pursues differentiation, you target a 13% share in the USA market. If your forecast yields a total market demand of 6,000 units in the next round, what would your target (minimum production) volume be?

• 500 units

• 780 units

• 1,000 units

• 1,200 units

• 1,780 units

Onivo Auto Inc. has been the leader in low-cost and fuel-efficient engine technology for many years. It has been able to sustain its competitive advantage primarily because of its highly efficient automobile engines, which competitors have been unable to develop or buy at a reasonable price. In the context of the VRIO framework, which of the following resource attributes most likely underpins Onivo's competitive advantage?

• The resource is easy to replicate.

• The resource is costly to imitate.

• The resource neutralizes external opportunities.

• The resource decreases the perceived value of its products.

Based on these data, what is your firm’s Price Elasticity of Demand (PED)?

• |PED| = 0.72

• |PED| = 0.39

• |PED| = 1.39

• |PED| = 1.72

Which of the following is the correct order of the strategic management process?

• Strategy formulation → Strategic analysis → Strategy implementation

• Strategic analysis → Strategy formulation → Strategy implementation

• Strategy implementation → Strategic analysis → Strategy formulation

• Strategy formulation → Strategy implementation → Strategic analysis

When a firm manufactures 5,000–6,000 units of a product, it incurs an average cost of $12 per unit. When it manufactures 6,000–7,000 units of the same product, the average cost per unit reduces to $7. However, manufacturing beyond 7,000 units will raise the average cost per unit to $9. Which of the following is the firm’s minimum efficient scale?

• below 2,000 units

• 5,000–6,000 units

• 6,000–7,000 units

• above 7,000 units

According to the CESIM Initial Round 0 results, each of the 7 firms in your industry has 14.29% share in the USA combustion market. What is the industry's Herfindahl-Hirschman Index (HHI)?

• HHI = 1229.20

• HHI = 1429.43

• HHI = 1599.04

• HHI = 2042.04

You are assessing your current marketing efficiency based on the 4Ps framework in the Europe electric market in CESIM. Given the following data, what is your firm’s composite marketing efficiency score?

• 0.25
• 0.35

• 0.45

• 0.55