Deck 9: Value Chain Management: Functional Strategies for Competitive Advantage

Question 1

Users of Adobe Reader, created by Adobe Systems Incorporated, are prompted to provide feedback on their experiences with the software in a bid to improve the product.In this case, Adobe Systems Incorporated is trying to gain a competitive advantage through

A)superior efficiency.
B)superior infrastructure.
C)superior innovation.
D)superior speed and flexibility.
E)superior responsiveness to customers.

Answer 1

E
Explanation: An organization that is responsive to customers tries to satisfy their needs and give them exactly what they want.

Question 2

The just-in-time view of inventory leads an organization to stockpile excess inputs in a warehouse in case it needs them to meet sudden upturns in demand.

Answer 2

False
Explanation: The just-in-time inventory system is a system in which parts or supplies arrive at an organization when they are needed, not before.

Question 3

Good value chain management requires that marketing managers focus on the type of products it makes.

Answer 3

True
Explanation: Good value chain management requires that marketing managers focus on defining their company's business in terms of the customer needs it is satisfying and not by the type of products it makes-or the result can be disaster.

Question 4

According to total quality management philosophy, the managers involved in quality control or engineering define the quality.

Question 5

A tire company's products are more expensive than those offered by its competitors, but are still sought after by customers since they are more durable and perform better under harsh conditions.The tire company, in this case, has achieved competitive advantage through

A)marketing strategies.
B)superior quality.
C)quantum product innovation.
D)pricing strategies.
E)promotional strategies.

Question 6

Which of the following should an organization do in order to obtain a competitive advantage through superior efficiency?

A)make products that are much more reliable than the products available in the market
B)reduce the number of inputs it requires to produce a given amount of outputs
C)use technology to make its product unique and different when compared to its rivals'
D)conduct surveys to determine whether a product will be successful in the market
E)create products that will attract customers and charge a premium price for those products

Question 7

A value chain is a series of functional activities that convert inputs into finished goods or services that customers value.

Question 8

An automobile manufacturer redesigning the body of one of its cars to improve its aerodynamics is an example of quantum product innovation.

Question 9

An organization gains competitive advantage when it

A)lowers costs and decreases differentiation.
B)increases costs and/or decreases differentiation.
C)increases costs and increases differentiation.
D)lowers costs and/or increases differentiation.
E)increases costs and/or lowers prices.

Question 10

Higher product quality can increase efficiency and thereby lower operating costs.

Question 11

A written agreement that details product development factors such as responsibilities, resource commitments, budgets, timelines, and development milestones is called a contract book.

Question 12

Marketing function involves research activities to create new or improved products that add value to a product.

Question 13

Using the Internet to manage the value chain reduces the costs of coordination both between the company and its customers and between the company and its suppliers.

Question 14

Incremental product innovation results in the development of new, often radically different, kinds of goods and services because of fundamental shifts in technology brought about by pioneering discoveries.

Question 15

Inputs from an organization's members are sufficient for successful product development.

Question 16

Innovation refers to producing goods and services that have attributes-such as design, styling, performance, and reliability-that customers perceive as being superior to those found in competing products.

Question 17

Flexible manufacturing is a strategy based on the use of manual labor to reduce the costs associated with the product assembly process or the way services are delivered to customers.

Question 18

The goal of Six Sigma is to improve a company's quality to only six defects per million.

Question 19

Which of the following should an organization do in order to obtain a competitive advantage through superior innovation?

A)reduce the number of components that go into its products
B)decrease the number of product attributes and lower the price of its products
C)set up a strong team to handle after-purchase support
D)produce products with technologies that have not been used previously
E)provide high-quality products to create a brand-name reputation for its products

Question 20

Soliciting information and suggestions about improvements from employees is one of the steps in implementing a successful TQM program.

Question 21

For converting inputs into outputs, _____ is responsible for creating, assembling, or providing a good or service.

A)materials management
B)production
C)customer service
D)marketing
E)sales

Question 22

An organization's audit revealed that its customer support system is the least effective department.The customer support system is a major source of the organization's _____ defects.

A)product
B)manufacturing
C)service
D)distribution
E)supply

Question 23

An organization that increases its quality can improve its profits by _____ the prices of its products due to increased reliability and _____ its operating costs due to increased productivity.

A)decreasing; reducing
B)reducing; increasing
C)increasing; increasing
D)increasing; reducing
E)discounting; increasing

Question 24

Attaining _____ includes all the other methods of achieving competitive advantage.

A)superior efficiency
B)superior quality
C)superior innovation
D)superior responsiveness to customers
E)superior speed and flexibility

Question 25

_____ is a management technique that focuses on improving attributes of an organization's products such as superior design, features, reliability, and after-sales support.

A)Effective client management (ECM)
B)Organizational efficiency management (OEM)
C)Total quality management (TQM)
D)Product manufacture management (PMM)
E)Customer relationship management (CRM)

Question 26

According to TQM philosophy, the _____, not the _____ in quality control or engineering, define what quality is.

A)managers; customers
B)customers; managers
C)employees; managers
D)managers; employees
E)employees; customers

Question 27

Managers try to develop functional strategies that allow the organization's value chain to deliver to customers

A)fewer product attributes at a lower price.
B)smaller products at a higher price.
C)more product attributes at a higher price.
D)the same product attributes at a lower price.
E)the same products at the same price.

Question 28

A _____ is a plan of action to improve the ability of each of an organization's departments to perform its task-specific activities in ways that add value to an organization's goods and services.

A)corporate-level strategy
B)divisional-level strategy
C)functional-level strategy
D)business-level strategy
E)branch-level strategy

Question 29

________ management is the development of a set of functional-level strategies that support a company's business-level strategy and strengthen its competitive advantage.

A)Total quality
B)Human resource
C)Value chain
D)Materials
E)Marketing

Question 30

Red Fox Supplies solved customer problems and provided customer service to form an awareness of superior product value in the minds of its customers.This is an example of strong

A)production function.
B)sales function.
C)customer service function.
D)marketing function.
E)materials management function.

Question 31

Which of the following is essential for good value chain management?

A)The materials management function should hold greater inventories in order to increase costs.
B)The marketing function should define business in terms of customer needs rather than the type of products.
C)The production function should locate customers and persuade them to buy the company's products.
D)The sales function should control the movement of physical materials from the procurement of inputs to delivery to the customer.
E)The customer service function should focus on offering high-quality products at higher prices.

Question 32

_____ is a technique that uses IT to develop an ongoing relationship with the purchasers or buyers of an organization's product to maximize the value an organization can deliver to them over time.

A)Effective reliability management (ERM)
B)Organizational efficiency management (OEM)
C)Total quality management (TQM)
D)Continuous innovation management (CIM)
E)Customer relationship management (CRM)

Question 33

Which of the following is a potential outcome when organizations offer a very high level of responsiveness to customers?

A)Quality of products will become low.
B)Customer satisfaction will decrease.
C)Company costs will become too high.
D)Customer relationship will not improve.
E)Production costs will decrease.

Question 34

Which of the following is true about the impact of high-quality products?

A)High product quality results in high operating costs.
B)High product quality results in high employee productivity.
C)High product quality lowers efficiency.
D)High product quality reduces profits.
E)High product quality lowers customer retention.

Question 35

The implementation of customer relationship management (CRM) is a method of

A)managing inventory.
B)changing the organizational structure.
C)getting close to customers and understanding their needs.
D)improving an organization's product development plan.
E)rearranging the facility layout.

Question 36

Which of the following is not a product attribute or quality that most customers prefer?

A)high-quality products
B)products with valuable features
C)customized products
D)quick after-sales service
E)products with few features

Question 37

Which of the following is true about total quality management?

A)Output goals and targets should include only numbers.
B)The number of steps to assemble a product should be increased.
C)Managers should ask employees for suggestions about improvements.
D)Incentives such as bonus pay and promotional opportunities should be eliminated.
E)A just-in-case inventory system should be introduced.

Question 38

Which of the following functions should a company use to help increase customer perceptions of the utility of a company's product through brand positioning and advertising?

A)design
B)materials management
C)production
D)marketing
E)customer service

Question 39

A(n) _____ is a series of functional activities needed to transform inputs into finished goods or services.

A)operating system
B)marketing function
C)organizational hierarchy
D)value chain
E)customer relationship management system

Question 40

The _____ function plays a crucial role in an organization's value chain by locating customers and then informing and persuading them to buy the company's products.

A)production
B)materials management
C)customer service
D)marketing
E)sales

Question 41

Self-managed teams use _____, in which different teams assemble each component part and then send those parts to a final assembly team.

A)process layouts
B)fixed-position layouts
C)utility layouts
D)product layouts
E)sequential layouts

Question 42

The _____ the input resources required to produce a given volume of output, the _____ will be the efficiency of the operating system.

A)more; higher
B)fewer; higher
C)smaller; lower
D)fewer; lower
E)larger; greater

Question 43

________ is the process of designing the machine-worker interface to increase operating system efficiency.

A)Facilities layout
B)Flexible manufacturing
C)Process reengineering
D)Total quality management
E)Materials management

Question 44

Great cost savings can result from _____ inventory turnover and _____ inventory holding costs, such as warehousing and storage costs.

A)increasing; reducing
B)increasing; increasing
C)decreasing; reducing
D)decreasing; increasing
E)varying; increasing

Question 45

Which of the following is the rationale behind the development of flexible manufacturing techniques?

A)Efficiency will increase with an increase in the setup time for complex production.
B)Efficiency will improve with an increase in setup costs.
C)Actual production time will decrease with a decrease in setup time.
D)An increase in setup time will increase the actual production time.
E)Efficiency will increase with an increase in the actual production time.

Question 46

_______ is an approach that creates teams of expert change agents known as "green belts and black belts" to take control of problem finding, problem solving, and training other employees in implementing solutions.

A)Total quality management
B)Continuous improvement
C)Six Sigma
D)Process reengineering
E)Product development function

Question 47

Which of the following is true about the members of a self-managed team?

A)They learn a single task and are posted at a single job.
B)They require multiple supervisors to monitor them.
C)They are responsible for escalating company's costs.
D)They assume the responsibilities of first-line managers.
E)They create a taller organizational hierarchy, thereby increasing efficiency.

Question 48

The main aim of flexible manufacturing is to

A)create products that can be modified easily.
B)create a standard range of products.
C)set up large workforces.
D)improve an organization's management systems.
E)reduce the time required to set up production equipment.

Question 49

Six Sigma shares with TQM its focus on improving value chain processes to increase

A)productivity.
B)quality.
C)innovation.
D)flexibility.
E)employee involvement.

Question 50

The goal of Six Sigma is to improve a company's quality to only _____ defects per million by systematically altering the way all the processes involved in value chain activities are performed.

A)three
B)ten
C)thirty
D)five
E)six

Question 51

In order to design for ease of production, a company should

A)adopt a challenging quality goal.
B)design products that have fewer component parts.
C)increase the average number of customer queries solved per day.
D)decrease the number of employees performing a particular task.
E)create an additional product to be supplied with a main product.

Question 52

A firm manufactures custom-made furniture based on customer specifications.Which of the following facilities layouts would best suit the firm's needs?

A)process layout
B)fixed-position layout
C)sequential layout
D)product layout
E)flexible manufacturing layout

Question 53

_________ is the stock of raw materials, inputs, and component parts that an organization has on hand at a particular time.

A)Storage
B)Inventory
C)Products
D)Stored components
E)Holdings

Question 54

Which of the following is essential for implementing a successful total quality management program?

A)resisting change in the organization's culture
B)attributing product defects to poor customer service
C)associating service defects to the production system
D)introducing a just-in-case inventory system
E)breaking down barriers between functions

Question 55

Successful implementation of TQM requires substantial cooperation between

A)regulators and the organization.
B)customers and suppliers.
C)different value chain functions.
D)accounting and distribution functions.
E)managers and stockholders.

Question 56

_____ is a strategy based on the use of IT to reduce the costs associated with the product assembly processor the way services are delivered to customers.

A)Six Sigma
B)Flexible manufacturing technology
C)Process reengineering
D)Total quality management (TQM)
E)Customer relationship management (CRM)

Question 57

A _____ is a small, wheeled container used in a just-in-time inventory system to move component parts from suppliers to the assembly line.

A)container
B)gurney
C)conveyor belt
D)kanban
E)trailer

Question 58

To decrease product defects, materials managers must work closely with _____ to improve the quality of the raw materials and obtained parts.

A)suppliers
B)customers
C)employees
D)stockholders
E)distributors

Question 59

_____ is a measure of how well an organization's input resources are used to produce its outputs.

A)Efficiency
B)Quality
C)Reliability
D)Flexibility
E)Responsiveness

Question 60

In a _____ layout, machines are organized so that each operation needed to manufacture a product or process is performed at workstations arranged in a fixed sequence.

A)process
B)utility
C)facilities
D)product
E)fixed-position

Question 61

The first step in a stage-gate development funnel is to

A)draft a detailed product development plan.
B)provide a list of technological requirements.
C)encourage employees to come up with as many new product ideas as possible.
D)develop a detailed developmental budget.
E)sign a written agreement that details factors such as responsibilities and resource commitments.

Question 62

________ are the goods and products manufactured using fundamental shifts in technology as a result of pioneering discoveries.

A)Quantum process innovations
B)Quantum product innovations
C)Incremental product innovations
D)Incremental process innovations
E)Product development

Question 63

_____ is the fundamental rethinking and radical redesign of business procedures to achieve dramatic improvements in critical measures of performance such as cost, quality, service, and speed.

A)Product reengineering
B)Product research
C)Process reengineering
D)Flexible manufacturing
E)Efficiency monitoring

Question 64

_______ is a technique that forces managers to choose among competing projects so functional resources are not spread thinly over too many projects.

A)Brainstorming
B)A stage-gate development funnel
C)Process reengineering
D)A product development plan
E)A project development plan

Question 65

Which of the following is true about the impact of information systems and the Internet on companies in general?

A)It has resulted in reduced efficiency.
B)It has resulted in escalated costs.
C)It has increased the number of employees required to handle customer or supplier interactions.
D)It has increased the time required to handle requests or queries.
E)It has allowed for production scheduling to provide components on a just-in-time basis.

Question 66

A newsletter publisher in a small town accepts subscription requests and handles queries through the town's mail services and through online subscriptions.The publishing unit provides after-sale service and support to its online subscribers.This publisher is using

A)customer relationship management (CRM).
B)total quality management (TQM).
C)value chain management.
D)effective client management (ECM).
E)Six Sigma.

Question 67

A _________ is a written agreement that details factors such as responsibilities, resource commitments, budgets, time lines, and development milestones.

A)product development plan
B)contract book
C)product development proposal
D)contract plan
E)contract agreement

Question 68

__________ members of a team bear the primary responsibility for the success of a project and stay with a project from inception to completion.

A)Contract
B)Core
C)Permanent
D)Developmental
E)Founding

Question 69

When there are _____ inputs required to produce a given output, the efficiency is _____ and the cost of outputs is _____.

A)more; higher; lower
B)fewer; higher; lower
C)more; lower, lower
D)fewer; lower; higher
E)fewer; lower; lower

Question 70

______ is the gradual improvement and refinement of existing products over time as existing technologies are perfected.

A)Quantum process innovation
B)Quantum product innovation
C)Incremental product innovation
D)Incremental process innovation
E)Process reengineering

Question 71

Illumin, a light bulb manufacturing company, strives to improve the longevity and brightness of its bulbs by continuously changing designs and trying different combinations of materials and component parts while manufacturing them.This is an example of

A)quantum process innovation.
B)quantum product innovation.
C)incremental product innovation.
D)incremental process innovation.
E)process reengineering.

Question 72

_______ is the management of the value chain activities that bring new products or services to market.

A)Product promotion
B)Total quality management
C)Product positioning
D)Process reengineering
E)Product development

Question 73

The _____ function controls the movement of physical materials from the procurement of inputs through production and to distribution and delivery to the customer.

A)production
B)sales
C)product development
D)materials management
E)marketing

Question 74

The Donut House, a large donut bakery with outlets across several cities, improves the quality of the dough it uses and introduces a wide range of toppings and glazes to go with its donuts.This is an example of

A)quantum process innovation.
B)quantum product innovation.
C)incremental product innovation.
D)incremental process innovation.
E)process structuring.

Question 75

Which of the following is true about quantum product innovations?

A)Quantum product innovations are always more important than incremental product innovations.
B)Quantum product innovations involve improving and refining existing products.
C)Quantum product innovations are rarer than incremental product innovations.
D)Quantum product innovations are more frequent than incremental product innovations.
E)Quantum product innovations result largely from ongoing technological advances.

Question 76

Total quality management (TQM) is a technique that focuses on

A)using IT to develop an ongoing relationship with customers.
B)improving the quality of an organization's products and services.
C)increasing operating system efficiency.
D)using IT to reduce the costs of production assembly process.
E)creating an output that is valuable to the customer.

Question 77

Sawyer Outfits manufactures baby clothes.The company has worked hard to develop function strategies to deliver customers desired product attributes.The company is likely to see costs grow out of control if it

A)customizes every product to the unique demands of individual customers.
B)improves responsiveness to all customers.
C)responds to customer demand.
D)improves the quality of products to meet customer needs.
E)pursues to achieve superior quality.

Question 78

_______ is the development of new, often radically different, kinds of goods and services.

A)Quantum process innovation
B)Quantum product innovation
C)Incremental product innovation
D)Incremental process innovation
E)Process reengineering

Question 79

Which of the following must managers in product development avoid to promote innovation and speed up product development?

A)developing a structured process for evaluating ideas
B)funding too many project ideas at one time
C)providing incentives for employees to come up with ideas
D)allowing team members to brainstorm
E)establishing a stage-gate funnel

Question 80

The _____ plan specifies all of the relevant information that managers need to decide whether to go ahead with a full-blown product development effort.

A)product development
B)value chain
C)product positioning
D)process reengineering
E)quality control