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

Question 1

A high quality, well-designed product will always be successful in the market.

Answer 1

False

Question 2

Successful innovation gives an organization something unique about its products that can strengthen its competitive advantage.

Answer 2

True

Question 3

According to total quality management philosophy, quality is defined by the managers involved in quality control or engineering.

Answer 3

False

Question 4

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

Question 5

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 6

Market function is the engineering and scientific research activities involved in innovating new or improved products that add value to a product.

Question 7

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

Question 8

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.

Question 9

High quality products are characterized by low prices.

Question 10

A newsletter publisher in a small town accepts subscription requests and handles queries only through the town's mail services. The publishing unit keeps track of its customers by entering or modifying customer information in a book. This publisher is using a customer relationship management technique.

Question 11

Total quality management is a technique that focuses on improving the quality of an organization's products and services.

Question 12

The fewer the inputs required to produce a given output, the lower is the efficiency and the higher the cost of outputs.

Question 13

A company that customizes every product to the unique demands of individual customers is likely to have the least overall cost in its industry.

Question 14

Total quality management requires the cooperation of managers of certain functions of an organization.

Question 15

Managers try to develop functional strategies that allow the organization's value chain to deliver to customers less desired product attributes for the same price.

Question 16

Quality is a concept that can be applied to manufacturing but not to service organizations.

Question 17

Customer relationship management is a technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time.

Question 18

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

Question 19

Each functional activity along the value chain adds value to a product when it raises costs and decreases the price a company can charge for it.

Question 20

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

Question 21

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

Question 22

Total quality management focuses on stocking a large inventory so that raw materials are available even before they are needed.

Question 23

People often respond poorly to greater autonomy and responsibility; the use of empowered self-managed teams decrease productivity and efficiency.

Question 24

Process reengineering involves the fundamental rethinking and radical redesign of customer services.

Question 25

The members of a team who bear primary responsibility for the success of a project and who stay with a project from inception to completion are called contract members.

Question 26

A fixed-position layout is used for producing a variety of custom-made products, each tailored to the needs of a different kind of customer.

Question 27

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

Question 28

In a process layout, each workstation is self-contained, and a product goes to whichever workstation is needed to perform the next operation to complete the product.

Question 29

Product development is the management of the value chain activities involved in bringing new or improved goods and services to the market.

Question 30

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 31

The more steps required to assemble a product or provide a service, the more opportunities there are for making a mistake.

Question 32

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

Question 33

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.

Question 34

The greater the rate of technological change in an industry, the more important it is for managers to innovate.

Question 35

The gradual improvement and refinement of existing products over time as existing technologies are perfected are called incremental product innovations.

Question 36

Increasing the efficiency of a system is not related to attracting more customers.

Question 37

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 38

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

Question 39

Effective process reengineering reduces the number of order fulfillment tasks that must be performed or reduces the time each task takes.

Question 40

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 41

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 42

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) same products at the same price.
E) same product attributes at a lower price.

Question 43

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 44

A company with a strong _____ can create a perception of superior value in the minds of its clients by solving client problems and supporting clients after they have purchased its product.

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

Question 45

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 46

_____ 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 47

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. Adobe Systems Incorporated, in this case, 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.

Question 48

The development of a set of functional-level strategies that support a company's business-level strategy and strengthen its competitive advantage is known as:

A) total quality management.
B) human resource management.
C) value chain management.
D) materials management.
E) marketing management.

Question 49

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 50

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) Setup 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 51

An organization which 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 52

Which of the following functions is responsible for transforming creating, assembling, or providing a good or service?

A) Materials management
B) Production
C) Customer service
D) Marketing
E) Sales

Question 53

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 54

Which of the following is essential for a 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 55

A(n) _____ is a coordinated series or sequence 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 56

Which of the following functions can 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 57

An organization gains competitive advantage when it:

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

Question 58

The implementation of the customer relationship management (CRM) is a method of improving an organization's _____.

A) inventory
B) organizational structure
C) responsiveness to customers
D) product development plan
E) facility layout

Question 59

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 60

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) High prices

Question 61

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) three hundred

Question 62

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

A) storage
B) inventory
C) products
D) stored components
E) holdings

Question 63

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 64

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 65

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 66

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 67

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 train other employees in implementing solutions is called _____.

A) total quality management
B) continuous improvement
C) Six Sigma
D) lean manufacturing
E) return on quality (ROQ)

Question 68

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 69

A firm manufactures custom-made furniture based on customer specifications. Which of the following facilities layout 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 70

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 71

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) Employees should be asked 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 72

The strategy of designing the machine-worker interface to increase operating system efficiency is called _____.

A) facilities layout
B) flexible manufacturing
C) process reengineering
D) customer relationship management
E) materials management

Question 73

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 74

In a _____, 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 layout
B) utility layout
C) facilities layout
D) product layout
E) fixed-position layout

Question 75

Which of the following is true of 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 76

_____ 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 77

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 78

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

A) Six Sigma
B) Flexible manufacturing
C) Process reengineering
D) Niche marketing
E) Customer relationship management

Question 79

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 80

_____ 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)