Value Chain & Competitive Strategy Test Bank Docx Chapter.9

Contemporary Management, 11e (Jones)

Chapter 9 Value Chain Management Functional Strategies for Competitive Advantage

1) Efficiency is a measure of the amount of inputs required to produce a given amount of outputs.

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

3) As part of his company's materials management function, Juan is responsible for assembling newly purchased bicycles and performing repairs.

4) Good value chain management requires that marketing managers focus primarily on the type of products the company makes.

5) Higher product quality can increase employee productivity, which translates to lower operating costs.

6) Implementing a successful TQM program requires functions within the value chain to operate independently, ensuring optimization and focus within each function.

7) According to total quality management philosophy, the managers responsible for engineering and quality control are responsible for defining quality.

8) Quantum product innovation results in improvements and refinements of products over time as existing technologies are perfected and managers gain experience performing value chain activities.

9) A mobile phone manufacturer redesigning a phone to improve ergonomics and enhance styling is an example of quantum product innovation.

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

11) To achieve ________, managers must find a way to lower costs and/or increase differentiation.

A) quantum innovation

B) superior quality

C) total quality management

D) a competitive advantage

E) value chain management

12) To create a competitive advantage through superior efficiency, an organization must

A) make products that are much more reliable than other available products 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 than other products in the market.

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.

13) An appliance manufacturer's products are in high demand despite their premium pricing due to the products' reliability and lower maintenance costs. The manufacturer has achieved a competitive advantage through

A) superior efficiency.

B) superior quality.

C) quantum product innovation.

D) superior innovation.

E) incremental product innovation.

14) For an organization to obtain a competitive advantage through superior innovation, it should

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.

15) A local car dealership sells a minivan to a couple. Three days later, they call the couple to ensure they are happy with the purchase and to address any questions or concerns they may have regarding the new vehicle. This dealership is trying to gain a competitive advantage through superior

A) efficiency.

B) product quality.

C) innovation.

D) speed and flexibility.

E) responsiveness to customers.

16) A ________ strategy is a plan of action to improve the ability of a department to perform its task-specific activities in ways that add value to an organization's goods and services.

A) corporate-level

B) competitive

C) functional-level

D) business-level

E) value chain

17) ________ 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) Customer relationship

18) ________ refers to a series of functional activities needed to transform inputs into valuable finished goods or services.

A) Competitive advantage

B) Total quality management

C) Facilities layout

D) Value chain

E) Customer relationship management

19) A company wants to promote a new line of tools as easy-to-use and more adaptable than competitors' products. Which value chain function would the company use to develop customer perceptions of the utility of the new tools?

A) design

B) materials management

C) production

D) marketing

E) customer service

20) Reba works as a teller at a local bank. What function in the value chain is she performing?

A) materials management

B) production

C) customer service

D) marketing

E) sales

21) As a member of the ________ function within his company, Arturo visits new businesses to educate them on the features and advantages offered by his company's products.

A) production

B) materials management

C) customer service

D) marketing

E) sales

22) Over many years, Speedy Delivery has built a strong reputation and a loyal client base by ensuring all delivery issues are quickly resolved to the satisfaction of both senders and receivers. This is an example of an effective ________ function.

A) production

B) sales

C) customer service

D) marketing

E) materials management

23) A company that continually improves management of its value chain in order to supply products with the quality, cost, and features desired in the market is demonstrating

A) total quality management.

B) just-in-time improvement.

C) quantum innovation.

D) superior responsiveness to customers.

E) incremental innovation.

24) Managers pursue functional-level strategies that allow the organization's value chain to provide

A) fewer product attributes at a consistent price.

B) fewer product attributes at a higher price.

C) consistent product attributes at a higher price.

D) the same product attributes at a lower price.

E) consistent product attributes at a consistent price.

25) Sue discovers that by rearranging the design of components in a product, she is able to reduce the product housing by 20%, which saves the company money on materials, packaging, and shipping. Her redesign strategy is an example of

A) customer relationship management.

B) total quality management.

C) facilities layout.

D) flexible manufacturing.

E) value chain management.

26) Organizations should refrain from offering too high a level of responsiveness to customers because

A) quality of products will become low.

B) customer demands will continually grow.

C) company costs may become too high.

D) customer relationships will not improve.

E) production schedules will increase.

27) In order to effectively manage the company's value chain,

A) the materials management function should hold greater inventories in order to avoid shortages.

B) the marketing function should focus on 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 procurement through customer delivery.

E) the customer service function should focus on offering high-quality products at higher prices.

28) A retailer leverages an integrated IT system to connect information across multiple functions including details surrounding product sales, service calls, and the effectiveness of marketing campaigns. The retailer is using ________ to maximize the value it delivers over time.

A) Six Sigma management

B) incremental innovation

C) total quality management

D) quantum innovation

E) customer relationship management

29) Tristan conducts service and installation visits for a cable company. He uses an online system to access a client's history and updates the system with results from all interactions. This is an example of using ________ to be responsive and build loyalty.

A) business-level strategy

B) process reengineering

C) customer relationship management

D) self-managed work teams

E) total quality management

30) Increased quality allows an organization to make greater profits by ________ the product's price due to improved reliability and ________ operating costs due to improved productivity.

A) decreasing; reducing

B) stabilizing; increasing

C) increasing; increasing

D) increasing; reducing

E) discounting; increasing

31) When a company boosts product quality, it can also expect

A) higher operating costs.

B) greater employee productivity.

C) longer production times.

D) stronger market competition.

E) less engaged employees.

32) ________ is a technique that focuses all functions within an organization on improving the design, features, reliability, and after-sales support of products.

A) Flexible manufacturing

B) Just-in-time management

C) Total quality management

D) Quantum innovation

E) Customer relationship management

33) According to TQM philosophy, who is responsible for defining what constitutes quality for a product or service?

A) quality control engineers

B) customers

C) marketing managers

D) CEOs

E) service personnel

34) To effectively implement total quality management, managers should

A) minimize interactions across departments to increase functional focus.

B) demand that employees achieve quality goals without added incentives.

C) ask employees for suggestions about improvements.

D) focus on the cost of the quality program.

E) stockpile inventory to avoid manufacturing delays.

35) A company that produces business telephones does an audit of customer complaints. The results reveal that the customer support department has the biggest share of complaints. This represents a ________ defect.

A) product

B) manufacturing

C) service

D) distribution

E) supply

36) The stock of raw materials, inputs, and component parts that an organization has on hand at a particular time is referred to as

A) storage.

B) inventory.

C) product.

D) overflow.

E) holdings.

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

A) suppliers

B) customers

C) employees

D) stockholders

E) marketers

38) To realize improvements in ease of production, a company should

A) keep production methods constant for employee continuity.

B) design products with 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 as an adjunct to the main product.

39) A successful total quality management (TQM) program requires

A) minimizing changes in the organization's culture.

B) attributing defects to the appropriate production function(s).

C) focusing on defect solutions, not sources.

D) soliciting feedback from division-level managers and above.

E) breaking down barriers between functions.

40) Rhea's company sets specific goals for product features and reliability, offers incentives for achieving goals, and regularly solicits employee feedback on the causes of customer issues. These activities are part of a ________ system.

A) customer relationship management

B) stage-gate development

C) total quality management

D) production

E) value chain program

41) The goal of Six Sigma is to improve a company's quality to only three defects per million by

A) systematically altering the way all processes involved in value chain activities are performed.

B) limiting the value chain implementation to six functions.

C) focusing process improvements on the manufacturing and production activities in the value chain.

D) focusing process improvements on the sales and after-sales support activities in the value chain.

E) building relationships with customers to increase value over time.

42) ________ 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

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

A) productivity.

B) quality.

C) innovation.

D) flexibility.

E) production.

44) The ________ input resources required to produce a given volume of output are, the ________ efficiency of the operating system will be.

A) more expensive; higher

B) fewer; higher

C) less complex; lower

D) fewer; lower

E) more complex; greater

45) ________ 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

46) A furniture company uses an online system to record and monitor orders and, based on trends, redirects production resources to optimize efficiency. This is an example of using ________ to reduce costs.

A) Six Sigma

B) flexible manufacturing

C) process reengineering

D) total quality management (TQM)

E) customer relationship management (CRM)

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

A) Facilities layout

B) Flexible manufacturing

C) Production reengineering

D) Total quality management

E) Materials management

48) An automobile assembly line is arranged in a ________ layout, with a fixed sequence of workstations adding specific components until the full vehicle is assembled.

A) process

B) just-in-time

C) facilities

D) product

E) fixed-position

49) A firm manufactures custom-made furniture. Which 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

50) Complex, difficult-to-move products are often produced using a ________ layout.

A) process

B) fixed-position

C) utility

D) product

E) sequential

51) The primary goal of flexible manufacturing is to

A) create products that can be modified easily.

B) repeatedly produce a standard product design.

C) manage interactions among large factory teams.

D) reduce the space needed for equipment.

E) reduce the time required to set up production equipment.

52) Flexible manufacturing techniques are based on the premise that

A) increases in setup time will minimize errors that could delay production.

B) decreases in setup time will allow time for adding production steps.

C) simplifying the activities at each station will minimize errors that could delay production.

D) rearranging workstations will increase the sense of urgency to produce products faster.

E) decreases in setup time will increase time available for greater production output.

53) Ethan and his peers developed an entirely new set and sequence of order fulfilment tasks that improved organizational efficiency by 20%. The team's efforts demonstrate

A) stage-gate development.

B) incremental innovation.

C) self-managed work teams.

D) process reengineering.

E) product reengineering.

54) Increasing materials turnover and reducing holding costs are key contributors to cost savings achieved by using a

A) just-in-time inventory strategy.

B) quantum innovation strategy.

C) flexible manufacturing strategy.

D) fixed-position layout.

E) self-managed team.

55) Members of a self-managed team often

A) develop depth of experience in a single task.

B) are closely monitored by functional supervisors.

C) produce just part of a product.

D) have some responsibility for hiring, ordering materials, and managing schedules.

E) operate according to specific rules, SOPs, and restrictive norms.

56) ________ is the fundamental rethinking and radical redesign of business procedures to achieve dramatic improvements in cost, quality, service, and speed.

A) Product redesign

B) Product research

C) Process reengineering

D) Flexible manufacturing

E) Total quality management

57) What is one important way that information systems and the Internet have impacted companies?

A) The value chain has become more complex and difficult to manage.

B) Costs have escalated due to technology maintenance.

C) More positions have become available for employees who want to handle customer interactions.

D) The time to handle requests has increased .

E) Suppliers are able to provide components on a just-in-time basis.

58) ________ is the development of new, often radically different, kinds of goods and services.

A) Six Sigma

B) Quantum product innovation

C) Incremental product innovation

D) Flexible product manufacturing

E) Process reengineering

59) ________ 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) Product process reengineering

60) Every few months, a farm-to-table bistro increases the variety of its menu by taking advantage of new and novel produce offered by local farmers. This is an example of

A) quantum process innovation.

B) quantum product innovation.

C) incremental product innovation.

D) incremental process innovation.

E) flexible manufacturing.

61) A company invests considerably in research, with a dedicated team that is challenged to scour the industry for breakthrough ideas that could allow the business to create new products with unique features. This company demonstrates a commitment to

A) stage-gate development.

B) process reengineering.

C) quantum product innovation.

D) quantum process innovation.

E) incremental product innovation.

62) A pharmaceutical company's Research and Development lab identified a new way to treat a disease, with expectations that it will improve patients' survival rates. This is an example of

A) value chain management.

B) quantum product innovation.

C) incremental product innovation.

D) incremental process innovation.

E) stage-gate product development.

63) Lumen, a manufacturer of theatre lighting, strives to improve the longevity and brightness of its lights by continuously changing designs and trying different combinations of component parts during manufacturing. This is an example of

A) quantum process innovation.

B) quantum product innovation.

C) incremental product innovation.

D) incremental process innovation.

E) process reengineering.

64) ________ is the management of the value chain activities that bring new goods or services to market.

A) Product promotion

B) Total quality management

C) Marketing

D) Process reengineering

E) Product development

65) To speed product development and promote innovation, managers should avoid

A) forcing a structured process for evaluating ideas.

B) funding too many project ideas at one time.

C) tailoring products to meet customer demands.

D) allowing team members to waste time brainstorming.

E) establishing a stage-gate funnel.

66) Each month, a team of managers evaluates new and in-progress projects and determines which ones will receive the necessary functional resources to progress in the coming month. This process demonstrates

A) brainstorming.

B) a stage-gate development funnel.

C) process reengineering.

D) incremental innovation.

E) flexible manufacturing.

67) 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.

68) To support a go/no-go decision, a ________ plan outlines the features, resource needs, timeline, and expected benefits associated with realizing a new project.

A) product development

B) value chain

C) stage-gate development

D) process reengineering

E) quality control

69) A ________ is a written agreement that details project factors such as responsibilities, resources, budgets, timelines, and development milestones.

A) product development plan

B) contract book

C) product development proposal

D) stage-gate development book

E) total quality management plan

70) Riya is assigned to a new project and has ownership for key project stages from planning, through development, to delivery. Riya is considered a ________ member of the project team.

A) contract

B) core

C) supporting

D) developmental

E) founding

71) A company recently implemented strategies to reduce the number of inputs required to produce outputs at various stages of the value chain. This has resulted in ________ efficiency and the cost of outputs is ________.

A) reduced; higher

B) greater; reduced

C) constant, lower

D) higher; reduced

E) reduced; constant

72) In order to succeed, how should an organization respond to customer demands?

A) Customer demands should be considered within the context of top-down management decisions.

B) Customer demands are most relevant to later functions in the value chain.

C) Customer demands should be satisfied and products customized to individual customers.

D) Customer demands should drive value chain activities.

E) Customer demands should be considered but are not as important as internal product expertise.

73) A local newspaper hosts a booth at community events and uses electronic tablets to create new subscriptions on the spot. It also accepts subscription inquiries and article commentary through an online site and regularly sends notices to readers about important updates to the newspaper. This publisher is implementing

A) customer relationship management.

B) total quality management.

C) Six Sigma principles.

D) value chain management.

E) product innovation.

74) An outdoor-furniture company decides to add a line of gas grills. By focusing value chain activities on the quality, cost, and features that will allow the grills to compete favorably in the market, the company is demonstrating

A) customer responsiveness.

B) employee empowerment.

C) customer relationship management.

D) total quality management.

E) process reengineering.

75) 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 product assembly processes.

E) creating an output that is valuable to the customer.

76) For successful total quality management (TQM),

A) quality is evaluated externally by customers after delivery.

B) suggestions for improvement are provided by high-level managers only.

C) managers in every function must cooperate.

D) additional steps in the production process must be implemented.

E) a just-in-time inventory shouldn't be used.

77) Increasing the efficiency of an operating system has the effect of

A) increasing end-to-end production times.

B) requiring more resources to support production.

C) minimizing the cost of raw materials and components.

D) enabling an organization to make a greater profit.

E) reducing production quantities in exchange for speed.

78) Game Play sells gaming systems and allows customers to mix-and-match individual components when placing a system order. Which type of facilities layout would best serve Game Play's production needs?

A) fixed-position

B) process

C) flexibly

D) product

E) office

79) A headphone manufacturer uses advancements in technology to continually improve the sound quality of its products. This is an example of

A) incremental product innovation.

B) quantum process innovation.

C) quantum product innovation.

D) incremental process innovation.

E) process development engineering.

80) Miranda suggests to her company that they should introduce self-managed teams in order to

A) specialize team member skills.

B) increase workforce efficiency.

C) simplify production processes.

D) build a taller organizational hierarchy.

E) centralize management responsibilities.

81) A recent review of the company's operational costs showed that it needed to achieve dramatic improvements in all aspects of performance to stay competitive. What should the CEO do to best improve performance?

A) Increase management oversight of employees.

B) Launch a process reengineering task force.

C) Approve incremental product changes.

D) Add steps to each value chain activity to monitor results.

E) Implement a flexible manufacturing model.

82) Maintaining close coordination of value chain functions such as engineering, manufacturing, and marketing throughout a product development is best achieved through using

A) total quality management.

B) incremental innovation.

C) a self-managed team.

D) a cross-functional team.

E) a stage-gate development funnel.

83) Involving customers and suppliers in product development, establishing a stage-gate funnel process, and creating cross-functional teams are value chain strategies that

A) ensure internal and external demands are met.

B) exchange productivity for faster delivery.

C) sacrifice efficiency for greater organizational buy-in.

D) elevate management oversight.

E) increase product innovation.

84) A group consists of key representatives from all departments in the product development process, such as marketing, sales, finance, and manufacturing. These core members have primary responsibility for the product, with supporting resources as needed. This is an example of a(n)

A) self-managed team.

B) cross-functional team.

C) flexible workforce.

D) extended team.

E) CRM team.

85) In a stage-gate development funnel model,

A) detailed development plans are presented at stage 1.

B) new product ideas are generated at every stage.

C) new product ideas are encouraged at stage 1.

D) stage 2 focuses on forming cross-functional teams to develop ideas.

E) projects are only rejected at stage 2.

86) Identify the two critical sources of feedback associated with an effective total quality management (TQM) system and explain how each source helps improve the quality of products and services.

87) Define a value chain and the concept of value chain management. Select two functions within a value chain and provide an example of effective management for each.

88) Successful companies devote time and resources to value chain management, using CRM, TQM, and other techniques to improve goods and services. Describe the primary motivation for this investment and distinguish which general product attributes or qualities these techniques strive to achieve.

89) What is customer relationship management? Describe three changes a local grocery store could make as part of implementing a customer relationship management system.

90) A company hires a quality consultant to guide it through the process of implementing total quality management across the organization. Describe the focus of TQM and three of the steps the consultant might recommend.

91) What is Six Sigma? Describe what Six Sigma and total quality management (TQM) have in common as well as the primary difference between them.

92) Describe the three basic approaches to arranging workstations and provide an example of a product best suited to each layout.

93) Describe the effect of flexible manufacturing and just-in-time inventory management on a company's value chain's efficiency.

94) What is process reengineering? Select a company that would be prompted to pursue such an initiative and explain how reengineering could add value.

95) Define the two principal types of innovation. What is the main difference between them?

96) What is the driving motivation for implementing a stage-gate development funnel? Describe the activities that take place during a stage-gate development funnel's three primary stages.

97) Describe three characteristics of a self-managed team and explain how this strategy contributes to business success.

98) A motorcycle manufacturing company has a strong reputation for durable and easy-to-operate motorcycles. The company wants to maintain responsiveness to customer needs and further improve attributes of their products. Describe a functional strategy that the company can use to get closer to customers and best understand their needs.

99) A car detailing company charges a premium for its white-glove service. The company is booked weeks in advance due to its reputation for impeccable results and prompt resolution of any customer concern. Explain why achieving superior quality is a crucial aspect of this company's success.

100) New Wave Energy manufactures solar panels for residential and commercial use. Throughout the entire production process, the company carefully monitors quality and ensures adherence to a strict set of metrics. Explain how producing higher quality solar panels can lead to lower costs for the company.