Schm 331 Test 1 ch 2

How can global operations improve the supply chain?

The supply chain can often be improved by locating facilities in countries where unique resources are available.

An organization that has worked to achieve global uniformity in cultural and ethical issues such as bribery, child labor, and environmental regulations is ________.

The World Trade Organization

The theory of competitive advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

False

Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage through product differentiation/innovation.

True

Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service.

True

Key success factors are those activities that are key to achieving competitive advantage.

True

NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.

True

One reason for global operations is to gain improvements in the supply chain.

True

One reason to globalize is to learn to improve operations.

True

Outsourcing is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.

True

Production processes are being dispersed to take advantage of national differences in labor costs.

True

The World Trade Organization has helped to significantly reduce tariffs around the world.

True

The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.

True

The theory of comparative advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

True

To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize.

True

NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False

Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.

False

SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats.

False

The term renewal has been created to describe the return of business activity to the originating country.

False

Since the early 1990s, residents in a number of developing countries have overcome culture, religious, ethnic, and political productivity barriers. These disappearing barriers coupled with simultaneous advances in technology, reliable shipping, and cheap communication have all led to the growth of what three things?

1. World trade 2. Global capital markets 3. International movement of people

Outsourcing is simply an extension of the long-standing practice of: A) subcontracting. B) importing. C) exporting. D) postponement. E) e-procurement

A

The term maquiladora is most synonymous with: A) free trade zones in Mexico. B) Chinese forced labor camps. C) home-based or cottage industry. D) areas that do not meet U.S. standards for workplace safety and pollution. E) tax breaks provided by some South American countries to other South American countries.

A

Which of the following statements is most correct? A) KSFs are often necessary, but not sufficient for competitive advantage. B) KSFs are often sufficient, but not necessary for competitive advantage. C) KSFs are neither necessary nor sufficient for competitive advantage. D) KSFs are both necessary and sufficient for competitive advantage. E) None of the above statements is correct.

A

Provide an example of an organization that achieves competitive advantage through experience differentiation. Explain.

Answers will vary, but Disney and Hard Rock Café are illustrated in the text. Competing on experience differentiation implies providing uniqueness to your service offering through immersion of the consumer into the service, with visual or sound elements to turn the service into an experience.

Identify five countries from which Boeing's 787 Dreamliner has suppliers.

Any five of: France, Germany, UK, Italy, Japan, China, South Korea, Sweden, and the United States

A firm can effectively use its operations function to yield competitive advantage through all of the following EXCEPT: A) customization of the product. B) setting equipment utilization goals below the industry average. C) speed of delivery. D) constant innovation of new products. E) maintaining a variety of product options.

B

According to the authors, which of the following strategic concepts allow firms to achieve their missions? A) productivity, efficiency, and quality leadership B) differentiation, cost leadership, and response C) differentiation, quality leadership, and response D) distinctive competency, cost leadership, and experience E) differentiation, distinctive competency, quality leadership, and capacity

B

Which of the following did the authors NOT suggest as a reason for globalizing operations? A) reduce costs B) improve the supply chain C) pursue stockholder approval ratings D) understand markets E) attract and retain global talent

C

The fundamental purpose of an organization's mission statement is to: A) create a good human relations climate in the organization. B) define the organization's purpose in society. C) define the operational structure of the organization. D) generate good public relations for the organization. E) define the functional areas required by the organization.

B

Which of the following is true of maquiladoras? A) They discourage foreign businesses from outsourcing. B) They assess tariffs only on the value-added work done. C) They originated in China. D) None of the above E) All of the above

B

Which of the following statements best characterizes delivery reliability? A) a company that always delivers on the same day of the week B) a company that always delivers at the promised time C) a company that delivers more frequently than its competitors D) a company that delivers faster than its competitors E) a company that has a computerized delivery scheduling system

B

Low-cost leadership is the ability to distinguish the offerings of the organization in a way that the customer perceives as adding value.

False

How do global operations attract new markets?

Because international operations require interaction with foreign customers, suppliers, and other competitive businesses, international firms inevitably learn about opportunities for new products and services.

________ and ________ are two issues where significant cultural differences are large, yet progress toward global uniformity is slowly being accepted.

Bribery, protection of intellectual property

Standardization is an appropriate strategy in which stage of the product life cycle? A) introduction B) growth C) maturity D) decline E) retirement

C

What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can? A) theory of competitive advantage B) theory of core competencies C) theory of comparative advantage D) theory of outsourcing E) theory of offshoring

C

Which of the following activities takes place most immediately once the mission has been developed? A) The firm develops alternative or back-up missions in case the original mission fails. B) The functional areas develop their functional area strategies. C) The functional areas develop their supporting missions. D) The ten OM decision areas are prioritized. E) Operational tactics are developed.

C

Which of the following does NOT represent a valid reason for globalizing operations? A) reduce costs B) improve the supply chain C) reduce responsiveness D) attract and retain global talent E) understand markets

C

Which of the following is an example of competing on quick response? A) A firm produces its product with less raw material waste than its competitors do. B) A firm offers more reliable products than its competitors do. C) A firm's products are introduced into the market faster than its competitors' products. D) A firm utilizes its capacity more effectively than its competitors do. E) A firm advertises more than its competitors do.

C

Which of the following statements about organizational missions is FALSE? A) They reflect a company's purpose. B) They indicate what a company intends to contribute to society. C) They are formulated after strategies are known. D) They define a company's reason for existence. E) They provide guidance for functional area missions.

C

Which of the following statements is most accurate? A) Nearly all outsourcing relationships do not last beyond two years. B) Nearly all U.S. firms that outsourced processes to India have backsourced them. C) Approximately half of all outsourcing agreements fail. D) Outsourcing is a relatively risk-free activity. E) More than 90% of outsourcing agreements succeed.

C

Which of the following statements is true? A) Corporate mission is shaped by functional strategies. B) Corporate strategy is shaped by functional strategies. C) Functional strategies are shaped by corporate strategy. D) External conditions are shaped by corporate mission. E) Functional area missions are merged to become the organizational mission.

C

Cost minimization is an appropriate strategy in which stage of the product life cycle? A) introduction B) growth C) adolescence D) decline E) retirement

D

Franz Colruyt has achieved low-cost leadership through: A) effective use of voice mail. B) plastic, not paper, shopping bags. C) background music that subtly encourages shoppers to buy more. D) converting factories, garages, and theaters into retail outlets. E) exclusive use of the Euro.

D

Response-based competitive advantage can be: A) flexible response. B) reliable response. C) quick response. D) all of the above. E) none of the above.

D

Which of the following has made the LEAST progress along its product life cycle? A) drive-through restaurants B) Boeing 787 C) iPods D) 3-D game players E) Xbox 360

D

Which of the following is LEAST likely to be a low-cost leadership competitive advantage? A) low overhead B) effective capacity use C) inventory management D) broad product line E) mass production

D

Which of the following is an example of competing on the basis of differentiation? A) A firm manufactures its product with less raw material waste than its competitors do. B) A firm's products are introduced into the market faster than its competitors' products are. C) A firm's distribution network routinely delivers its product on time. D) A firm offers more reliable products than its competitors do. E) A firm advertises more than its competitors do

D

Which of the following is not an advantage of outsourcing? A) cost savings B) gaining outside expertise C) improving operations and service D) outsourcing core competencies E) accessing outside technology

D

Competitive advantage through operations can be achieved by ________, ________, and/or ________.

Differentiation, low cost, response

A strategy is a(n): A) set of opportunities in the marketplace. B) broad statement of purpose. C) simulation used to test various product line options. D) plan for cost reduction. E) action plan to achieve the mission.

E

Advantages of outsourcing do NOT include: A) cost savings. B) gaining outside expertise. C) maintaining a focus on core competencies. D) accessing outside technology. E) potential creation of future competition.

E

An operations manager is performing a factor-rating analysis to help her choose an outsourcing provider. She is focusing on three factors: A, B, and C, with weights of .50, .20, and .30, respectively. She has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor-rating score for Ling Services? A) 98.0 B) 32.7 C) 21.8 D) 29.2 E) 30.8

E

Before establishing and implementing strategy, a resources view would ensure that which of the following resources are available? A) financial B) physical C) human D) technological E) all of the above

E

Key success factors and core competencies are synonyms.

False

Cost cutting in international operations can take place because of: A) lower taxes and tariffs. B) lower wage scales. C) lower indirect costs. D) less stringent regulations. E) all of the above.

E

Multinational organizations can shop from country to country and cut costs through: A) lower wage scales. B) lower indirect costs. C) less stringent regulations. D) lower taxes and tariffs. E) all of the above.

E

Outsourcing manufacturing is also known as: A) license manufacturing. B) sublease manufacturing. C) concurrent manufacturing. D) hollow manufacturing. E) contract manufacturing.

E

Porter's Five Forces Model contains which of the following? A) immediate rivals B) potential entrants C) customers D) suppliers E) all of the above

E

The ability of an organization to produce services that, by utilizing the consumer's five senses, have some uniqueness in their characteristics is: A) sensory response. B) time-based competition. C) differentiation. D) flexible response. E) experience differentiation.

E

Value-chain analysis can be used to determine if a business is adding unique value in which of the following areas? A) product research B) human resources C) process innovation D) quality management E) all of the above

E

Which of the following best describes experience differentiation? A) immerses consumers in the delivery of a service B) uses people's five senses to enhance the service C) complements physical elements with visual and sound elements D) consumers may become active participants in the product or service E) All of the above are elements of experience differentiation.

E

Which of the following environmental factors has not contributed to Microsoft's changing strategy? A) Google B) security issues C) faster processors D) the Internet E) global warming

E

Which of the following statements regarding the Dreamliner 787 is true? A) Boeing has found partners in over a dozen countries. B) The new aircraft incorporates a wide range of aerospace technologies. C) The new aircraft uses engines from not one, but two manufacturers. D) Boeing will add only 20 to 30 percent of the aircraft's value. E) All of the above are true.

E

Service organizations can immerse the consumer in the service, or have the consumer become a participant in the service, as they practice ________.

Experience differentiation

A product will always be in the same stage of its product life cycle regardless of the country.

False

Core competencies are good candidates for outsourcing.

False

________ are areas located along the United States-Mexico border in which factories receive preferential tariff treatment.

Maquiladoras

________ is the stage in product life cycle at which it is a poor time to change quality.

Maturity

________ is a free trade agreement among Canada, Mexico, and the United States.

NAFTA-North American Free Trade Agreement

________ is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.

Outsourcing

The ________ is how an organization expects to achieve its missions and goals.

Strategy

Starbucks is one of the best known coffeehouse chains in the world. Each store sells a variety of innovative products to complement the array of coffee choices available. However, 75% of current stores are located in the United States and the expensive nature of the coffee leaves Starbucks vulnerable to changes in consumer spending behavior (such as recessions). Recently Starbucks has begun initiatives to sell its specialty coffee beans for home use, presenting a chance for a large increase in revenue and diversification. However, Starbucks faces fierce competition seeking a piece of its lucrative market share and the threat of consumer behavior changes, given its reputation rides on a singular product. Perform an SWOT analysis for Starbucks.

Strengths—High profit specialty coffee, well-known brand image Weakness—Most stores located in the United States, most profits come from coffee (both are lack of diversification) Opportunities—Emerging market in coffee beans for home use, chance for global expansion Threats—Intense competition, consumer behavior changes (less spending during a recession on its luxury coffee, change in beverage preferences)

State two examples of cultural and ethical issues that face operations managers in a global environment.

Student responses will vary, but there are several issues on which there are wide differences from country to country, culture to culture. Among those listed in the text are bribery, child labor, the environment, and intellectual property rights. Students may bring forward from an earlier chapter issues such as environmental regulation or safe work environment, and may raise issues such as product safety.

Identify five main advantages of outsourcing.

(1) cost savings, (2) gaining outside expertise, (3) improving operations and service, (4) maintaining a focus on core competencies, and (5) accessing outside technology

Identify five main disadvantages of outsourcing.

(1) increased logistics and inventory costs, (2) loss of control (quality, delivery, etc.), (3) potential creation of future competition, (4) negative impact on employees, and (5) risks may not manifest themselves for years

Identify three factors fueling the continuing growth of outsourcing.

(1) increased technological expertise, (2) more reliable and cheaper transportation, and (3) the rapid development and deployment of advancements in telecommunications and computers.

Define core competencies.

A set of skills, talents, and capabilities in which a firm is particularly strong.

Which of the following OM strategy/issues should a firm with a product in the maturity stage of its life cycle be LEAST concerned with at the present time? A) increase capacity B) long production runs C) standardization D) cost cutting E) fewer rapid product changes

A

Which of the following has progressed the FURTHEST along its product life cycle? A) drive-through restaurants B) Boeing 787 C) iPods D) 3-D game players E) Xbox 360

A

Which of the following is the best example of competing on low-cost leadership? A) A firm produces its product with less raw material waste than its competitors do. B) A firm offers more reliable products than its competitors do. C) A firm's products are introduced into the market faster than its competitors' products are. D) A firm's research and development department generates many ideas for new products. E) A firm advertises more than its competitors do.

A

What is the difference between a firm's mission and its strategy?

A firm's mission is the purpose or rationale for its existence; whereas, a firm's strategy is how it expects to achieve its mission and goals.

An SWOT analysis determines: A) internal strengths and weaknesses and internal opportunities and threats. B) internal strengths and weaknesses and external opportunities and threats. C) external strengths and weaknesses and internal opportunities and threats. D) external strengths and weaknesses and external opportunities and threats. E) internal strengths and opportunities and external weaknesses and threats.

B

Experience differentiation: A) isolates the consumer from the delivery of a service. B) is an extension of product differentiation in the service sector. C) uses only the consumer's senses of vision and sound. D) keeps consumers from becoming active participants in the service. E) attempts to make the service experience different for every single customer.

B

Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time? A) forecasting B) cost cutting C) increasing capacity D) product and process reliability E) enhancing distribution

B

Porter's Five Forces Model is used to evaluate competition based on which 5 aspects? A) research and development, cost, legal regulations, suppliers, customers B) immediate rivals, potential entrants, customers, suppliers, and substitute products C) potential entrants, customers, suppliers, legal regulations, and cost D) immediate rivals, potential entrants, cost, substitute products, and legal regulations E) cost, legal regulations, advertising effectiveness, potential entrants, and immediate rivals

B

With reference to cultural and ethical issues, the World Trade Organization has: A) eliminated bribery. B) made progress in providing equal protection of intellectual property among nations. C) phased out all trade and tariff barriers between the United States and Mexico. D) eliminated slave labor and child labor. E) played little role in addressing cultural and ethical issues among nations.

B

Who introduced the concept of value-chain analysis? A) Ford B) Toyota C) Porter D) Smith E) Gates

C

The creation of a unique advantage over competitors is called a(n) ________.

Competitive advantage

An operations manager is performing a factor-rating analysis to help him choose an outsourcing provider. He is focusing on two factors: A and B, using a weight of 75% for factor A and 25% for factor B. He has scored five different potential providers on both factors, using a scale of 1-5, with 1 representing the BEST score. Based on the scores provided in the table below, which provider should be chosen? Provider Factor A Factor B Alpha 1 5 Beta 3 3 Gamma 4 1 Phi 2 1 Omega 3 5 A) Alpha B) Beta C) Gamma D) Phi E) Omega

D

Boeing's new 787 Dreamliner: A) is assembled in Washington, D.C. B) uses engines from Japan. C) has its fuselage sections built in Australia. D) has increased efficiency from new engine technology. E) results from a partnership of about a dozen companies.

D

The purpose of NAFTA is to: A) substitute cheap labor in Mexico for expensive labor in the United States. B) curb illegal immigration from Mexico to the United States. C) phase out all trade and tariff barriers between North America and South America. D) phase out all trade and tariff barriers between the United States, Canada, and Mexico. E) provide fair and equitable tariff rates for trade between the United States, Canada, and Mexico.

D

What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers? A) nearshoring B) farshoring C) offshoring D) outsourcing E) backsourcing

D

Which of the following is not part of value-chain analysis? A) product research B) quality management C) supply chain management D) marketing E) human resources

D

The ability of an organization to produce goods or services that have some uniqueness in their characteristics is: A) mass production. B) time-based competition. C) competing on productivity. D) competing on quality. E) competing on differentiation

E

Which of the following represents a reason for globalizing operations? A) to improve the supply chain B) to improve operations C) to expand a product's life cycle D) to attract and retain global talent E) all of the above

E

What is SWOT analysis? List its four elements and describe its purpose.

The four elements of SWOT are strengths, weaknesses, opportunities, and threats. Its purpose is to maximize opportunities and minimize threats in the environment, while maximizing the advantages of the organization's strengths and minimizing the weaknesses.

The theory of ________ implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

comparative advantage

Outsourcing manufacturing is also known as ________.

contract manufacturing

Outsourcing is an extension of the long-standing practice of ________ production activities.

subcontracting