Exam 2: Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Which of the following subjects would be found on the financial perspective section of a balanced scorecard?

Gordon Manufacturing produces high-end furniture products for the luxury hotel industry. Gordon has succeeded through excellence in design, careful attention to quality in manufacturing and in customer service, and through continuous product innovation. The manufacturing process at Gordon begins with a close consultation with each customer so that the finished product exactly meets the customer's specifications. This commonly means unique designs, special fabrics, and high levels of manufacturing quality. In addition, Gordon believes that a key competitive edge it has over other competitors is that it has an outstanding design staff that is able to work with customers to come up with product designs that go beyond the customer's expectations. Anticipating a growth in the demand for luxury hotel rooms, Gordon has expanded its operations to include one new manufacturing plant, and by refitting some of the older plants with newer, more efficient equipment. The installation of the new equipment has caused some delays in filling some customer orders, and Gordon has shifted production from those plants with the delays to other manufacturing plants. The result has been an increase in some processing costs, transportation costs, and delays in meeting customer order deadlines. Also, the introduction of the new equipment has created some tensions with employees who see the new, more efficient equipment as a potential threat to their job security. There is also some disagreement among managers as to whether the new equipment will improve or reduce quality. Required: Develop a SWOT analysis for Gordon Manufacturing. List one or more items in each category.

In order to remain competitive in the contemporary business environment, several firms have started training their employees to stop viewing problems as strictly functional - that is, as only a marketing problem, or an accounting problem, for example.What does this trend illustrate about strategic management?

During the strengths and weaknesses portion of a firm's SWOT analysis, which of the following would not be discovered?

Which of the following is not a key benefit of the balanced scorecard (BSC)?

Which of the following perspectives of a Balanced Scorecard would most likely be the ultimate target in a strategy map for a public company?

Levis Strauss and Co, maker of Levi's familiar 501, 512, and 711 brands of jeans, also makes a brand that was introduced for discount retailers such as Walmart. Levi's strategy with the new jeans (the Signature brand) was to sell a competitively priced pair of jeans. The jeans are about one-half or less the price of the familiar 501, 512, and 711 jeans. To get costs down Levi's: Uses cheaper fabrics and materials. Shuns costly mass-market advertising. Strictly limits the number of fits, styles, and colors. Required: 1. Assess the new strategy at Levi. What do you think are the potential benefits and risks? 2. How will the firm's value chain and balanced scorecard change as a result of the new strategy?

Which of the following does not represent a possible opportunity for a manufacturing firm as a part of SWOT analysis?

Patagonia, maker of clothing and gear for outdoor enthusiasts, is very conscious of sustainability issues.The company chose not to produce a product because:

A strategy map is:

The decline of the U.S.dollar relative to other currencies has caused firms outside the U.S., such as BMW and Volkswagen to:

A measure of research and development on the balanced scorecard could include:

A local pharmaceutical firm has just announced its discovery of a revolutionary new drug for dieting.However, due to its deteriorating relationship with its union, the unionized portions of the company's employees have threatened to strike.In addition, the company's stock has started to drop due to the firm's difficulty in paying off some of its debt.In this example, what was the firm's core competency(ies)?

Effective execution of the cost leadership strategy requires all of the following except:

When a firm is determining its opportunities and threats, which of the following would not be mentioned?

The World Resources Institute has defined:

The main objective of value chain analysis is to identify stages of the value chain where the firm can:

Exeter Industries produces and markets several lines of food and beverage products. The company plans to expand its market to cover a new geographical area, and the first products to be introduced into this new market are three of Exeter's coffees. A meeting of the marketing committee has been called to determine the pricing and promotional strategy for the introduction of these coffees. Exeter has adopted the differentiation strategy and is using the marketing committee to come up with the proper way to execute this strategy in the firm's pricing and promotional policy. Mark Williams, vice president of marketing, has suggested that Exeter continue its policy of premium pricing for Rich Roast Coffee in the new market. "Rich Roast is a superior blend of Brazilian coffees and should have little difficulty gaining customer acceptance. The use of other promotional strategies doesn't appear necessary at this time." Carol Randolph, general sales manager, agreed with this strategy for Rich Roast but recommended a different approach for Vitality Coffee, Exeter's brand of decaffeinated coffee. "Vitality is an unknown name in this region and will require a determined promotional effort to gain market share from other very competitive products. We could try penetration pricing or packaging options combined with either manufacturer's coupons or rebates. Whatever strategy we select, we should hit the market hard if we want to be successful." Dan Felton has been appointed regional sales manager for the new geographical area and is concerned about the acceptance of Mellow Roast Coffee, a blend of regular and decaffeinated coffees. "This is a brand new type of coffee in this region and may just sit on the shelf unless we develop an effective advertising campaign." Pricing or packaging options will be worthless unless the product gains some visibility and the targeted customer base is made aware of the benefits of Mellow Roast. We need a good slogan like "A gentle wakeup without caffeine stress!" Required: Mark Williams has suggested the continuance of premium pricing for Rich Roast Coffee. Explain the strategic role of premium pricing, and describe the economic circumstances in the marketplace that would encourage the use of this pricing strategy. (CMA adapted)

Many products in the marketplace today are built from components designed and manufactured by sub-contractors. While the extent of this practice is not well known to consumers, manufacture and sale of multi-component units that use parts from many different companies continues to grow. Required: If the assembling company is using value-chain analysis in its strategic planning, comment on the following: (a) The cost justification for subcontracting. (b) The willingness of consumers to buy products they know contain subcontracted parts. (c) The problems of quality control facing the assembling company.

In the late 1990s, the bicycle maker Cannondale Corp.faced a variety of key strategic issues.One was the firm's continued dependence on Shimano Inc.of Japan to supply many parts for its bikes, particularly the derailleur, brakes, and crankset.A particularly troublesome aspect of this situation was that Shimano's high-quality and highly innovative parts were relatively expensive.Cannondale wished to reduce its dependency on these outsourced parts.A second issue was the increasing competition from Trek Bicycle Corp.and Specialized Bicycle Components Inc.for bicycles in the upper-end range of the market where Cannondale competed.Cannondale had built a successful business on the basis of high quality and innovative products.Its customers were bicyclists who expected the highest quality and most advanced features.Industry analysts predicted consolidation in the industry for manufacturers that use Shimano parts but cannot differentiate their products effectively; these bicycle makers will likely be forced to compete on price. Required: 1.Consider the use of Shimano parts as one aspect of the value chain for Cannondale.Describe Cannondale's current strategy.How should this strategy change, if at all, to compete effectively with Trek and Specialized? 2.Should Cannondale continue to outsource Shimano parts? Why or why not?