Question: What are the strategic competitiveness outcomes

> A company wants to enter into a commitment to initiate a swap in 90 days. The swap would consist of four payments 90 days apart with the underlying being LIBOR. Use the following term structure of LIBOR to solve for the rate on this forward swap Term

> Consider a three-year receiver swaption with an exercise rate of 11.75 percent in which the underlying swap is a $20 million notional amount four-year swap. The underlying rate is LIBOR. At the expiration of the swaption, the LIBOR rates are 10 percent (

> A corporate cash manager who often invests her firm’s excess cash in the Eurodollar market is considering the possibility of investing $20 million for 180 days directly in a Eurodollar CD at 6.15 percent. As an alternative, she considers the fact that th

> A firm is interested in purchasing an interest rate cap from a bank. It has received an offer price from the bank but would like to determine if the price is fair. The cap will consist of two caplets, one expiring in 91 days and the other in 182 days. Th

> On January 15, a firm takes out a loan of $30 million, with interest payments to be made on April 16, July 15, October 14, and the following January 15, when the principal will be repaid. Interest will be paid at LIBOR based on the rate at the beginning

> You are a fund’s manager for a large bank. On April 15, your bank lends a corporation $35 million, with interest payments to be made on July 16, October 15, January 16, and next April 16. The amount of interest will be determined by LIBOR at the beginnin

> As the assistant treasurer of a large corporation, your job is to look for ways your company can lock in its cost of borrowing in the financial markets. The date is June 28. Your firm is taking out a loan of $20 million, with interest to be paid on Septe

> A large, multinational bank has committed to lend a firm $25 million in 30 days at LIBOR plus 100 bps. The loan will have a maturity of 90 days, at which time the principal and all interest will be repaid. The bank is concerned about falling interest rat

> You are the treasurer of a firm that will need to borrow $10 million at LIBOR plus 2.5 points in 45 days. The loan will have a maturity of 180 days, at which time all the interest and principal will be repaid. The interest will be determined by LIBOR on

> The following term structure of LIBOR is given. a. Find the rate on a new 6 9 FRA. b. Consider an FRA that was established previously at a rate of 5.2 percent with a notional amount of $30 million. The FRA expires in 180 days, and the underlying is 18

> The crude oil futures contract on the New York Mercantile Exchange covers 1,000 barrels of crude oil. The contract is quoted in dollars and cents per barrel (e.g., $27.42), and the minimum price change is $0.01. The initial margin requirement is $3,375,

> Explain the implied repo rate on a U.S. Treasury bond futures spread position.

> Explain how the Black model, which is designed for pricing options on futures contracts, can be used for pricing interest rate options.

> Suppose that you wish to buy stock and protect yourself against a downside movement in its price. You consider both a covered call and a protective put. What factors will affect your decision?

> A bank currently holds a loan with a principal of $12 million. The loan generates quarterly interest payments at a rate of LIBOR plus 300 basis points, with the payments made on the 15th of February, May, August, and November on the basis of the actual d

> Explain how an interest rate swap is a special case of a currency swap.

> Compare and contrast the credit value adjustment and the debit value adjustment for an interest rate swap. Why does a swap’s value increase when the firm’s credit rating deteriorates?

> a. Identify and discuss three reasons why U.S. Treasury yields are a biased low estimate for the risk-free rate. b. Explain why LIBOR is a biased high estimate for the risk-free rate. c. Explain the reason for considering OIS as an estimate for the risk-

> Define and explain a constant maturity swap.

> A hedge fund is currently engaged in a plain vanilla euro swap in which it pays euros at the euro floating rate of Erabor and receives euros fixed. It would like to convert this position into one in which it pays the return on the S&P 500and receives eur

> You are a pension fund manager who anticipates having to pay out 8 percent (paid semiannually) on $100 million for the next seven years. You currently hold $100 million of a floating-rate note that pays LIBOR 2 1/2 percent. You view this as an attractive

> A pension fund wants to enter into a six-month equity swap with a notional amount of $60 million. Payments will occur in 90 and 180 days. The swap will allow the fund to receive the return on a stock index, currently at 5,514.67. The fund is considering

> A U.S. corporation is considering entering into a currency swap that will call for the firm to pay dollars and receive British pounds. The dollar notional amount will be $35 million. The swap will call for semiannual payments using the adjustment 180/360

> On September 12, the cheapest-to-deliver bond on the December Treasury bond futures contract is the 9s of November YY 18. The bond pays interest semiannually on May 15 and November 15. Its price is 125 12/32. The December futures price is 112 24/32. The

> The Black–Scholes–Merton option pricing model assumes that stock price changes are log normally distributed. Show graphically how this distribution changes when an investor is long the stock and short the call.

> Repeat the previous problem, but now assume that the one-month LIBOR rate on December 1 was 5.5 percent.

> What organizational structures are used to implement the multidomestic, global, and transnational international strategies?

> What are the differences among the three versions of the multidivisional (M-form) organizational structures that are used to implement the related constrained, the related linked, and the unrelated corporate-level diversification strategies?

> What are the characteristics of the different functional structures used to implement the cost leadership, differentiation, integrated cost leadership/differentiation, and focused business-level strategies?

> What does it mean to say that strategy and structure have a reciprocal relationship?

> What is organizational structure and what are organizational controls? What are the differences between strategic controls and financial controls? What is the importance of these differences?

> What is a strategic network? What is a strategic center firm? How is a strategic center used in business-level, corporate-level, and international cooperative strategies?

> What is the nature of corporate governance in Germany, Japan, and China?

> What is the market for corporate control? What conditions generally cause this external governance mechanism to become active? How does this mechanism constrain top-level managers’ decisions and actions?

> What trends exist regarding executive compensation? What is the effect of the increased use of long-term incentives on top-level managers’ strategic decisions?

> How is each of the three internal governance mechanisms—ownership concentration, boards of directors, and executive compensation—used to align the interests of managerial agents with those of the firm’s owners?

> The mini-case makes it clear that FedEx and UPS have a number of similarities – resources, markets, and the competitive dimensions they emphasize to implement their strategies. However, as resources are not identical, both companies have sought to differ

> What is an agency relationship? What is managerial opportunism? What assumptions do owners of corporations make about managers as agents?

> What is meant by the statement that ownership is separated from managerial control in the corporation? Why does this separation exist?

> What is corporate governance? What factors account for the considerable amount of attention corporate governance receives from several parties, including shareholder activists, business press writers, and academic scholars? Why is governance necessary to

> How can corporate governance foster ethical decisions and behaviors on the part of managers as agents?

> What risks are firms likely to experience as they use cooperative strategies?

> Why do firms use cross-border strategic alliances?

> What are the three corporate-level cooperative strategies? How do firms use each of these strategies for the purpose of creating a competitive advantage?

> What are the four business-level cooperative strategies? What are the key differences among them?

> What is a strategic alliance? What are the three major types of strategic alliances firms form for the purpose of developing a competitive advantage?

> What is the definition of cooperative strategy, and why is this strategy important to firms competing in the twenty-first century competitive landscape?

> The mini-case describes how CEO succession at P&G has had a detrimental effect on firm performance. The successor, Bob McDonald, assumed the position in 2009 but lasted a little under four years. During his tenure, P&G failed to keep up with rivals’ sa

> What are the differences between the cost-minimization approach and the opportunity-maximization approach to managing cooperative strategies?

> What are political risks and what are economic risks? How should firms approach dealing with these risks?

> What five entry modes do firms consider as paths to use to enter international markets? What is the typical sequence in which firms use these entry modes?

> What are some global environmental trends affecting the choice of international strategies, particularly international corporate-level strategies?

> What are the three international corporate-level strategies? What are the advantages and disadvantages associated with these individual strategies?

> What four factors are determinants of national advantage and serve as a basis for international business-level strategies?

> What are the three basic benefits firms can achieve by successfully using an international strategy?

> What incentives influence firms to use international strategies?

> What are two important issues that can potentially affect a firm’s ability to successfully use international strategies?

> What does it mean to be “stuck in the middle” between two strategies (i.e., between low cost and differentiation strategies)?

> What factors affect the likelihood a firm will initiate a competitive response to a competitor’s action(s)?

> What factors affect the likelihood a firm will take a competitive action?

> How do awareness, motivation, and ability affect the firm’s competitive behavior?

> What is market commonality? What is resource similarity? What does it mean to say that these concepts are the building blocks for a competitor analysis?

> Who are competitors? How is competitive rivalry, competitive behavior, and competitive dynamics defined in the chapter?

> What competitive dynamics can be expected among firms competing in slow-cycle markets? In fast-cycle markets? In standard-cycle markets?

> What was the result of change in strategy implemented?

> What strategy was the new CEO at JC Penney seeking to implement given the generic strategies found in Chapter 4?

> Why was this strategy a disaster for JC Penney?

> What are core rigidities? What does it mean to say that each core competence could become a core rigidity?

> Is it possible that some of the firms mentioned in this Mini-Case (e.g., Renault, Nissan, Mazda, Peugot-Citroen, Opel-Vauxhall) might form a network cooperative strategy? If so, what conditions might influence a decision by these firms to form this parti

> How do firms identify internal strengths and weaknesses? Why is it vital that managers have a clear understanding of their firm’s strengths and weaknesses?

> What is outsourcing? Why do firms outsource? Will outsourcing’s importance grow in the future? If so, why?

> What is value chain analysis? What does the firm gain by successfully using this tool?

> What four criteria must capabilities satisfy for them to become core competencies? Why is it important for firms to use these criteria to evaluate their capabilities’ value-creating potential?

> What are capabilities? How do firms create capabilities?

> What are the differences between tangible and intangible resources? Why is it important for decision makers to understand these differences? Are tangible resources more valuable for creating capabilities than are intangible resources, or is the reverse t

> What is value? Why is it critical for the firm to create value? How does it do so?

> Why is it important for a firm to study and understand its internal organization?

> What is the importance of collecting and interpreting data and information about competitors? What practices should a firm use to gather competitor intelligence and why?

> What is a strategic group? Of what value is knowledge of the firm’s strategic group in formulating that firm’s strategy?

> What are the risks associated with the corporate-level strategic alliance between Renault and Nissan? What have these firms done to mitigate these risks?

> How do the five forces of competition in an industry affect its profit potential? Explain.

> What are the seven segments of the general environment? Explain the differences among them

> What is the external environmental analysis process (four parts)? What does the firm want to learn when using this process?

> What are the differences between the general environment and the industry environment? Why are these differences important?

> Why is it important for a firm to study and understand the external environment?

> What are the elements of the strategic management process? How are they interrelated?

> How would you describe the work of strategic leaders?

> What are stakeholders? How do the three primary stakeholder groups influence organizations?

> What are vision and mission? What is their value for the strategic management process?

> What does the resource-based model suggest a firm should do to earn above-average returns?

> What does it mean to say that the partners of an alliance have “complementary assets”? What complementary assets do Renault and Nissan share?

> According to the I/O model, what should a firm do to earn above-average returns?

> What are the characteristics of the current competitive landscape? What two factors are the primary drivers of this landscape?

> This case spotlights W. L. Gore & Associates, a company that is an outstanding example of corporate entrepreneurship in action. Founded in 1958, this firm was far ahead of its time in recognizing the intrinsic value of human capital. Using workforce know

> This case examines a Canadian fast food restaurant chain at a point when it is in the final stages of being acquired by a large investment firm. In the third quarter of 2014, Tim Hortons Inc. is poised for aggressive geographic expansion, is confronting

> This case thoroughly examines how Super Selectos, a local food retail chain from El Salvador, became successful in competing against Walmart, the largest food retailer in the world. After an overview of Central America region and the retail industry, the

> Starbucks Corporation is a model of extraordinary business success. Known for sourcing, roasting, and serving high quality coffee and for elevating and romanticizing the consumer’s experience, Starbucks’ rapid growth seemed unstoppable – at least until i

> This case highlights a pioneering airline company with humble roots, an enduring culture shaped by a maverick leader, and a record of success in an industry where most companies have failed to prosper in the decades since deregulation. Southwest Airlines

> Siemens is a leading global electrical engineering and electronics firm headquartered in Munich, Germany. Profiling a highly diversified company, this case addresses the issue of optimizing the business portfolio through a coherent corporate strategy. An

> The Safaricom case provides an excellent opportunity to apply strategic management concepts to a constantly growing and extremely competitive organization. Safaricom is the largest mobile service provider in Kenya. It offers not only means of mobile comm