Advantages of corporate retailing
The test is an institutional assessment indicator, important for the accreditation status of SBS
Swiss Business School.
The test has 5 major assessment indicators: Marketing, Management, Finance, Managerial
Accounting and Strategic Integration.
Directions: This is an individual exam. You are not allowed to use any papers or books or
seek the help of a friend. Each section contains independent questions. Each of the questions
or incomplete statements is followed by 4 suggested answers or completions. Select the one
that is best in each case. Good luck!
Exit Exam
MARKETING
- One of the advantages of corporate retailing is that corporate retail organization
achieve economies of scale, greater purchasing power, better-trained employees,
and _.
a. wider brand recognition
b. more locations
c. branded merchandise
d. âfreshâ merchandise
e. more advertising
Answer - An independent retailer using a central buying organization and joint promotion
efforts is known as a _.
a. corporate chain store b. voluntary chain
c. retailer cooperative
d. merchandising conglomerate
e. franchise organization
Answer - The internal records system supplies results data, but the marketing intelligence
system supplies data.
a. concurrent
b. secondary
c. research
d. happenings
e. premium
Answer - A is a set of procedures and sources managers use to obtain everyday
information about developments in the marketing environment.
a. marketing research system
b. marketing information system
c. product management system
d. marketing intelligence system
e. vertical system
Answer - A company can take several steps to improve the quality of its marketing
intelligence. If the company purchases competitive products for study, attends open
houses and trade shows, and reads competitorsâ published reports and stockholder
information, the company is using to improve the quality of its marketing
intelligence.
a. sales force surrogates
b. intermediaries
c. external networks
d. advisory panels
e. customer feedback systems
Answer - Other media for direct-response marketing includes television. Television is used by
direct marketers in conducting or producing âinfomercials,â videotext and interactive
TV, and _.
a. ad campaigns
b. direct response
c. at-home shopping channels
d. commercials
e. kiosks
Answer - The exchange process in the age of information has become increasingly customerinitiated and .
a. market specific
b. customer-controlled
c. marketer-orientated
d. private
e. marketer-controlled
Answer - The Internet provides marketers and consumers with opportunities for much greater
interaction and _.
a. ease of use
b. speed
c. specificity
d. convenience
e. individualization
Answer - We can say that a has three characteristics: (1) It is a source of competitive
advantage in that it makes a significant contribution to perceived customer benefits,
(2) it has applications in a wide variety of markets, and (3) it is difficult for
competitors to imitate.
a. core competency
b. business strategy
c. core technology
d. strategic business unit
e. winning strategy
Answer - Core competencies tend to refer to areas of special technical and production
expertise, where processes.
a. process benchmarks
b. distinctive capabilities c. core business values
d. value statements
e. mission statements tend to describe excellence in broader business
Answer - George Day sees market-driven organizations as excelling in three distinctive
capabilities: , customer linking, and channel bonding.
a. target marketing
b. market research
c. fulfilling customer needs d. market sensing
e. customer service relationships
Answer - Competitors find it hard to imitate companies such as Southwest Airlines, Dell, or
IKEA because they are unable to copy their .
a. product innovations
b. distribution strategy
c. pricing policies
d. activity systems
e. logistics system
Answer - One conception of holistic marketing views it as âintegrating the value exploration,
_ and value delivery activities with the purpose of building
long-term, mutually satisfying relationships and co-prosperity among key
stakeholders.â
a. value creation
b. value proposition
c. value management d. value research
e. value chain
Answer - Red Bull has gained of the worldwide energy drink market by skillfully
connecting with global youth.
a. 70 percent
b. 80 percent
c. 60 percent
d. 50 percent
e. 90 percent
Answer - Red Bull built buzz about the product through its _.
a. âbuzz marketing programâ
b. âin programâ
c. âmarketing programâ
d. âseeding programâ
e. âadvertising campaignâ
Answer - Global firms plan, operate, and their activities on a worldwide basis.
a. produce
b. coordinate
c. distribute
d. price
e. service
Answer - A global industry is defined as _.
a. an industry in which the strategic positions of competitors are
fundamentally affected by their overall global positions
b. an industry that operates in more than one country and captures
R&D, marketing, and other financial advantages in its costs and reputation.
c. an industry that operates in more than one country and has a strategic
position in many countries
d. a firm that operates in more than one country and has a sales and
marketing staff in those countries
e. an industry that has strategic positions in many countries but is not affected
by competition
Answer - A global firm is one that _.
a. where the strategic positions of competitors are fundamentally affected by
their overall global positions
b. operates in more than one country and captures R&D, marketing, and
other financial advantages in its costs and reputation
c. operates in more than one country and has a sales and marketing staff in
those countries
d. operates in more than one country and has a sales and marketing staff in
those countries developing
e. has strategic positions in many countries but is not affected by
competition researching
Answer - The major decisions in international marketing include which of the following steps?
a. Deciding whether to go abroad.
b. Deciding which markets to enter.
c. Deciding how to enter the market.
d. Deciding on the marketing program.
e. All of the above.
Answer - The internationalization process has four stages. These stages are .
a. no regular export activities
b. export via independent representatives (agents)
c. establishment of one or more sales subsidiaries
d. establishment of production facilities abroad
e. all are part of the internationalization process
Answer
MANAGEMENT - Relatively enduring resource transactions flows, and linkages that occur among two or
more organizations are called:
a. Intranet.
b. interorganizational relationships.
c. resource dependence.
d. institutional environment.
Answer - A system formed by the interactions of a community of organizations and their
environment is referred to as a(n):
a. interorganizational relationships.
b. organizational ecosystem.
c. collaboration network.
d. institutional environment.
Answer - In this new world, managers think about rather than vertical structures.
a. profit-making
b. stakeholders
c. horizontal structures
d. competition
Answer - Which of the following is not part of the framework of interorganizational
relationships?
a. population ecology
b. institutionalism
c. collaborative network
d. shared competition
Answer - Which theory argues that organizations try to minimize their reliance on other
organizations for the supply of important resources and try to influence the
environment to make resources available?
a. interorganization theory
b. environmental resource theory
c. resource dependence theory
d. economic supply theory
Answer - Which of the following statements is false?
a. Functional managers may be the head of a payroll department.
b. Functional managers often oversee several general managers.
c. Functional managers may be responsible for making sure that payroll checks
are issued on time and in the correct amounts.
d. General managers may be responsible for a strategic business unit or a
division.
Answer - General managers usually have managers reporting to them.
a. country
b. top
c. regional
d. functional
Answer - One who understands the workings of a business enterprise is aware of the fact that in
large organizations, managers may be distinguished by the scope of the activities they
manage. Therefore, which of the following statements is accurate?
a. Functional mangers supervise employees with general skills that may be
applied to many roles.
b. General Managers supervise employees with specialized skills in a single area.
c. General Managers may be responsible for the operation of a department, but
only if it is very small.
d. General Managers are responsible for the overall operations of a more complex
unit such as a company or division.
Answer - In what specific sequence do managers perform their managerial functions in order to
achieve company goals?
a. planning, organizing, leading, controlling
b. organizing, leading, controlling, planning
c. leading, controlling, planning, organizing
d. None of the above because the functions are often performed simultaneously.
Answer - American Expressâ decision to grow their customer base, and establish global partners
is an example of which managerial function?
a. organizing
b. planning
c. directing
d. controlling
Answer - All of the following are reasons managers plan except:
a. coordinating human, material, and information resources.
b. establishing an overall direction for the organizationâs future.
c. identifying and committing the organizationâs resources to achieving its goals.
d. deciding which tasks must be done to reach those goals.
Answer - Managers can better coordinate human, material, and information resources by:
a. organizing effectively.
b. delegating issues.
c. leading team members.
d. focusing on issues.
Answer - In the process managers set standards of performance, measure current
performance against those standards, take action to correct any deviations, and adjust
the standards if necessary.
a. planning
b. organizing
c. leading
d. controlling
Answer - Howard Schultz, CEO of Starbucks, believes that its success is due to competitive
spirit, ability to respond to customersâ needs, and its process.
a. leading
b. planning
c. controlling
d. organizing
Answer - YUM! Brands is divided into five distinct restaurant brands for the purpose of serving
the specialized needs of customers. What managerial function is being employed to
achieve this type of clarity?
a. organizing
b. planning
c. leading
d. controlling
Answer - When Lois Dimpfel, vice president of IBM Worldwide Olympic Technology
Systems, was organizing the team to bring the Salt Lake City Games to millions of
TV viewers, she was primarily involved in the managerial
function.
a. planning
b. controlling
c. organizing
d. leading
Answer - Kerry Smith has just moved into a top-level managerial role with Pepsi products.
Which of the following is not part of the planning process Smith will be engaged in?
a. establishing directions for the organization
b. identifying the organization’s resources to achieve organizational goals
c. committing the organization’s resources to achieve organizational goals
d. structuring relationships among employees that will enable them to carry out
management’s plans and meet specific goals
Answer - Starbucks attributes its success to the managerial function of ,
which includes control procedures such as the criteria used to hire people, the type of
coffee beans used, and the physical layout of stores.
a. planning
b. controlling
c. directing
d. organizing
Answer - The planning function is the dynamic process of making decisions that focuses on
.
a. outsourcing
b. past performance
c. future performance
d. technical skills
Answer - Once managers have defined goals for future performance, they must translate those
relatively abstract desires into reality. The coordination effort to do this represents
_.
a. organizing
b. planning
c. controlling
d. leading
Answer
FINANCE - The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the
Australian dollar was $0.69. The Australian dollar by _%.
A) depreciated; 5.80
B) depreciated; 4.00
C) appreciated; 5.80
D) appreciated; 4.00
Answer - If a currencyâs spot rate market is _, its exchange rate is likely to be
to a single large purchase or sale transaction.
A) liquid; highly sensitive
B) illiquid; insensitive
C) illiquid; highly sensitive
D) none of the above.
Answer - __ is not a factor that causes currency supply and demand schedules to
change.
A) Relative inflation rates
B) Relative interest rates
C) Relative income levels
D) Expectations
E) All of the above are factors that cause currency supply and demand schedules
to change.
Answer - A large increase in the income level in Mexico along with no growth in the U.S.
income level is normally expected to cause (assuming no change in interest rates or
other factors) a(n) in Mexican demand for U.S. goods, and the Mexican peso
should _.
A) increase; appreciate
B) increase; depreciate
C) decrease; depreciate
D) decrease; appreciate
Answer - An increase in U.S. interest rates relative to German interest rates would likely
the U.S. demand for euros and the supply of euros for sale.
A) reduce; increase
B) increase; reduce
C) reduce; reduce
D) increase; increase
Answer - Investors from Germany, the United States, and the U.K. frequently invest in each
other based on prevailing interest rates. If British interest rates increase, German
investors are likely to buy dollar-denominated securities, and the euro is
likely to relative to the dollar.
A) fewer; depreciate
B) fewer; appreciate
C) more; depreciate
D) more; appreciate
Answer - When the ârealâ interest rate is relatively low in a given country, then the currency of
that country is typically expected to be:
A) weak, since the countryâs quoted interest rate would be high relative to the
inflation rate.
B) strong, since the countryâs quoted interest rate would be low relative to the
inflation rate.
C) strong, since the countryâs quoted interest rate would be high relative to the
inflation rate.
D) weak, since the countryâs quoted interest rate would be low relative to the
inflation rate.
Answer - Assume that the inflation rate becomes much higher in the U.K. relative to the U.S.
This will place pressure on the value of the British pound. Also,
assume that interest rates in the U.K. begin to rise relative to interest rates in the U.S.
The change in interest rates will place pressure on the value of the
British pound.
A) upward; downward
B) upward; upward
C) downward; upward
D) downward; downward
Answer - In general, when speculating on exchange rate movements, the speculator will borrow
the currency that is expected to appreciate and invest in the country whose currency is
expected to depreciate.
A) True
B) False
Answer - Baylor Bank believes the New Zealand dollar will appreciate over the next five days
from $.48 to $.50. The following annual interest rates apply:
Currency Lending Rate Borrowing Rate
Dollars 7.10% 7.50%
New Zealand dollar (NZ$) 6.80% 7.25%
Baylor Bank has the capacity to borrow either NZ$10 million or $5 million. If Baylor
Bankâs forecast if correct, what will its dollar profit be from speculation over the fiveday period (assuming it does not use any of its existing consumer deposits to
capitalize on its expectations)?
A) $521,325.
B) $500,520.
C) $104,262.
D) $413,419.
E) $208,044.
Answer - Which of the following is a reason why commercial banks can facilitate international
trade?
A) The exporter may not wish to accept credit risk of the importer.
B) The government may impose exchange contracts that prevent payment
by the importer to the exporter.
C) The exporter may need financing until payment for the goods is received.
D) All of the above
Answer - Consider an exporter that sells its accounts receivables off to another firm that
becomes responsible for obtaining cash from the various importers. This reflects:
A) accounts receivable financing.
B) consignment.
C) factoring.
D) a letter of credit.
Answer - Consider a bank that acknowledges that it will make payments on behalf of a
computer importer after the computers are delivered to the importer. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
Answer - Consider an importer that issues a promissory note to pay for the imported capital
goods over a period of five years. The notes are extended to an exporter who sells
them at a discount to a bank. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
Answer - Consider an exporter that is willing to send goods to the importer without a guaranteed
payment by the bank. The bank provides a loan to the exporter that is backed by the
value of the exported goods. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
Answer - MNCs can use to sell their existing accounts receivable as a means of
obtaining cash.
A) factoring
B) a bill of lading
C) a bankerâs acceptance
D) a letter of credit
Answer - was established in 1934 with the intention to facilitate Soviet-American
trade.
A) Domestic International Sales Corporation (DISC)
B) Private Export Funding Corporation (PEFCO)
C) Export-Import Bank
D) Foreign Credit Insurance Association (FCIA)
Answer - A provides a summary of freight charges and conveys title to the
merchandise.
A) letter of credit
B) bankerâs acceptance
C) bill of lading
D) bill of exchange
Answer - According to the text, international trade activity has generally over
time. This should cause the popularity of trade finance techniques to
over time.
A) increased; increase
B) increased; decrease
C) decreased; increase
D) decreased; decrease
Answer - BIS stands for:
a) international code for payments
b) central bank of the central banks in the world.
c) World bank located in New York
Answer
MANAGERIAL ACCOUNTING - A is a fixed cost; B is a variable cost. During the current year the level of activity has
decreased but is still within the relevant range. We would expect that:
A) The cost per unit of A has remained unchanged.
B) The cost per unit of B has decreased.
C) The cost per unit of A has decreased.
D) The cost per unit of B has remained unchanged.
Answer - Which costs will change with an increase in activity within the relevant range?
A) Unit fixed cost and total fixed cost
B) Unit variable cost and total variable cost
C) Unit fixed cost and total variable cost
D) Unit fixed cost and unit variable cost
Answer - Salaries of accounts receivable clerks when one clerical worker is needed for every
750 accounts receivable is an example of a:
A) fixed cost
B) step-variable cost
C) mixed cost
D) curvilinear cost
Answer - Limousine Conversion Company purchases ordinary Cadillacs, cuts them in half, and
then adds a middle section to the vehicles to create stretch limousines. With respect to
the number of cars converted, the cost of the Cadillacs purchased for conversion by
Limousine Conversion Company would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) variable cost
Answer - For an automobile manufacturer, the cost of a driver’s side air bag purchased from a
supplier and installed in every automobile would best be described as a:
A) fixed cost.
B) mixed cost.
C) step-variable cost.
D) variable cost.
Answer - With respect to a fixed cost, an increase in the activity level within the relevant range
results in:
A) an increase in fixed cost per unit.
B) a proportionate increase in total fixed costs.
C) an unchanged fixed cost per unit.
D) a decrease in fixed cost per unit.
Answer - A budget that is based on the actual activity of a period is known as a:
A) continuous budget.
B) flexible budget.
C) static budget.
D) master budget.
Answer - The fixed manufacturing overhead budget variance equals:
A) Actual fixed manufacturing overhead cost–Applied fixed manufacturing
overhead cost.
B) Actual fixed manufacturing overhead cost–Budgeted fixed manufacturing
overhead cost.
C) Budgeted fixed manufacturing overhead cost–Applied fixed manufacturing
overhead cost.
D) Actual fixed manufacturing overhead cost– (Actual hours x Standard fixed
overhead rate).
Answer - Which of the following variances is least significant from a standpoint of cost
control?
A) materials price variance.
B) labor efficiency variance.
C) fixed overhead volume variance.
D) variable overhead spending variance.
Answer - The manufacturing overhead variance that is a measure of capacity utilization is:
A) the overhead spending variance.
B) the overhead efficiency variance.
C) the overhead budget variance.
D) the overhead volume variance.
Answer - If the denominator activity is less than the standard hours allowed for the actual
output, one would expect that:
A) the variable overhead efficiency variance would be unfavorable.
B) the fixed overhead volume variance would be favorable.
C) the fixed overhead budget variance would be unfavorable.
D) the variable overhead efficiency variance would be favorable.
Answer - The volume variance is nonzero whenever:
A) standard hours allowed for the output of a period differ from the denominator
level of activity.
B) actual hours differ from the denominator level of activity.
C) standard hours allowed for the output of a period differ from the actual hours
during the period.
D) actual fixed overhead costs incurred during a period differ from budgeted
fixed overhead costs as contained in the flexible budget.
Answer - A volume variance is computed for:
A) both variable and fixed overhead.
B) variable overhead only.
C) fixed overhead only.
D) direct labor costs as well as overhead costs.
Answer - Which of the following standard cost variances would usually be least controllable by
a production supervisor?
A) Fixed overhead volume variance.
B) Variable overhead efficiency variance.
C) Direct labor efficiency variance.
D) Materials usage (quantity) variance.
Answer - During the year the balance in the prepaid expenses account increased by $6,000. In
- In a statement of cash flows, all of the following would be classified as operating
activities except:
A) interest paid to creditors.
B) dividends received on stock in another company held as an investment.
C) dividends paid to the company’s own common stockholders.
D) interest received on a long-term note receivable.
Answer - In a statement of cash flows, a change in accounts payable account would be
classified as:
A) an operating activity.
B) a financing activity.
C) an investing activity.
D) a noncash item that need not appear on the statement of cash flows.
Answer
order to adjust the company’s net income to a cash basis using the direct method on
the statement of cash flows, it would be necessary to:
A) deduct the $6,000 from the operating expenses reported on the income
statement.
B) add the $6,000 to the operating expenses reported on the income statement.
C) deduct the $6,000 from the cost of goods sold reported on the income
statement.
D) add the $6,000 to the cost of goods sold reported on the income statement.
Answer - A decrease in the plant and equipment account of $100,000 over the course of a year
would be shown on the company’s statement of cash flows prepared under the indirect
method as:
A) an addition to net income of $100,000 in order to arrive at net cash provided
by operating activities.
B) a deduction from net income of $100,000 in order to arrive at net cash
provided by operating activities.
C) an addition of $100,000 under investing activities.
D) a deduction of $100,000 under investing activities.
Answer - Which of the following should be classified as an investing activity on a statement of
cash flows?
A) cash received from the sale of office equipment that was sold at a loss.
B) cash used to purchase a long-term investment in bonds of another corporation.
C) cash received from the issuance of Iguato Corporation common stock.
D) both A and B above
E) all of the above
Answer - Which of the following should be classified as an investing activity on a statement of
cash flows?
A) cash paid for income taxes.
B) cash paid for dividends to stockholders.
C) cash paid to employees for services rendered.
D) none of the above
Answer
STRATEGIC INTEGRATION - Long-term objectives are needed at which level(s) in an organization?
a. Corporate
b. Divisional
c. Functional
d. all of these
e. none of these
Answer - Financial objectives involve all of the following except:
a. growth in revenues.
b. larger market share.
c. higher dividends.
d. greater return on investment.
e. a rising stock price.
Answer - What principle is based on the belief that the true measure of a really good strategist
is the ability to solve problems?
a. Managing by crisis
b. Managing by objectives
c. Managing by extrapolation
d. Managing by exception
Answer - What principle is built on the idea that there is no general plan for which way to go
and what to do?
a. Managing by crisis
b. Managing by extrapolation
c. Managing by objectives
d. Managing by hope
e. Managing by exception
Answer - All of the following are important factors in the Balanced Scorecard except:
a. customer service.
b. employee morale.
c. product quality.
d. business ethics.
e. stockholder equity.
Answer - Which level of strategy is most likely not present in small firms?
a. Corporate/company
b. Functional
c Divisional
d. Operational
e. All of these are present in small firms
Answer - A business-level strategy is concerned with..
a. all of the business in which a company intends to compete.
b. all policies and procedures used in various functional areas.
c. the firmâs action to exploit its competitive advantage in a strategic sense in the
marketplace.
d. a unique combination of the firmâs resources, strategic intent and mission.
Answer - Southwest Airlines selling tickets through Galileo is an example of which type of
strategy?
a. forward integration
b. backward integration
c. horizontal integration
d. related diversification
e. unrelated diversification
Answer - Whirlpool selling its struggling Hover floor-care business to Techtronic Industries is
an example of which type of strategy?
a. related diversification
b. unrelated diversification
c. retrenchment
d. divestiture
e. liquidation
Answer - Burger King opening its first restaurant in Japan is an example of which type of
strategy?
a. forward integration
b. backward integration
c. horizontal integration
d. market development
e. product development
Answer - Which of the following is most likely not included in the functional level of a small
company?
a. Finance
b. Marketing
c. R & D
d. Department managers
e. Human resource managers
Answer - Integration strategies are sometimes collectively referred to as which of these strategies?
a. Horizontal integration
b. Diversification
c. Vertical integration
d. Stuck-in-the-middle
e. Hierarchical integration
Answer - Why is market segmentation an important variable in strategy implementation?
- Which of the following variables are not directly affected by market segmentation?
a. Product
b. Place
c. Process
d. Promotion
e. Price
Answer - Why is market segmentation an important variable in the strategy-implementation
a. all company strategies require increased sales through new markets and
products.
b. it allows a firm to operate with limited resources.
c. mass production, mass distribution and mass advertising are not always required.
d. market segmentation decisions directly affect marketing mix variables.
e. all of the above
Answer
process?
a. company strategies do not require increased sales through new markets and
products.
b. it allows a firm to operate with no resources.
c. it directly affects marketing mix variables.
d. it allows a firm to minimize per-unit profits and per-segment sales.
e. all of the above
Answer - Perhaps the most dramatic new market segmentation strategy is the
a. targeting of regional tastes.
b. focusing on universal product.
c. preference of international over domestic sales.
d. treatment of industrial markets.
e. none of these
Answer - Matching of which factors would allow factories to produce desirable levels without
extra shifts, overtime or subcontracting?
a. markets and competitors
b. competition and positioning
c. customer behavior and positioning
d. supply and demand
e. segments and demand
Answer - Which variable would be considered part of the product element of the marketing mix?
a. Advertising
b. Packaging
c. Payment terms
d. Inventory levels and location
e. Publicity
Answer - Which variable would be considered part of the place element of the marketing mix?
a. Product line
b. Service level
c. Personal selling
d. Sales territory
e. Discounts and allowances
Answer - What entails developing schematic representations that reflect how your products or
services compare to competitorsâ on dimensions most important to success in the
industry?
a. Positioning
b. Segmentation
c. Penetration
d. Diversification
e. Budgeting
