MGT Exam 2 Ch.4

A value chain analysis: a. Is an alternative framework within which to compare costs with your competitors b. Is an alternative framework within which to compare cost improvements in the last few years c. Is an alternative framework within which to compare a firm's profit margins with its competitors d. Is a framework for analyzing the chain of production of a good from nature to the 'final consumer'

*a. Is an alternative framework within which to compare costs with your competitors

Increasing flight reliability at Singapore Airlines: a. Is likely to be the outcome of several linked activities b. Is basically down to the age of the planes c. Depends on the incentives given to ground and air crew for planes to take off on time d. Answers b and c

*a. Is likely to be the outcome of several linked activities

54. In many industries the market leaders @Pages and References: Pages 192-197 a. Manage to reconcile low costs with some effective differentiation b. Are the cost leaders c. Have very well-differentiated brands a. Answers b and c

*a. Manage to reconcile low costs with some effective differentiation

56. Porter says that firms get stuck in the middle because: @Pages and References: Pages 192-197 a. The mindsets of cost-minimization and differentiation are culturally opposed, and firms cannot optimize the investments needed for both at once b. As A above and firms need very different organizational processes to achieve the lowest costs or effective differentiation in the industry c. Many firms are run by CEOs who think strategically, but fail to act strategically d. Many firms have had several different CEOs, each determined to pursue different strategies

*b. As A above and firms need very different

Cost leadership means a firm must: a. Exploit all sources of cost advantage before tailoring the product to each customer b. Exploit all sources of cost advantage in providing customers with a standardised product c. Exploit all sources of cost advantage in providing each customer with their minimum requirements d. Exploit all sources of cost advantage while providing every customer an individual service

*b. Exploit all sources of cost advantage in providing customers with a standardised product

Differentiation is when a firm: a. Offers customers something valuable and unique b. Offers customers something valuable and unique other than a low price c. Offers customers a uniquely low price d. Offers customers products with many additional features

*b. Offers customers something valuable and unique other than a low price

The value chain analysis of Singapore Airlines shown is: a. A fully-worked professional analysis that could be sold to SA b. A first cut analysis, the result of ten minutes work c. A good start on analysis but now needs to be followed up with hard figures of cost comparisons between SA and its rivals d. A waste of time; SA does not have a cost leadership strategy anyway

*c. A good start on analysis but now needs to be followed up with hard figures of cost comparisons between SA and its rivals

The seven drivers of cost advantage: a. Must be equally examined in all firms b. Can be a useful framework within which to compare a firm's cost improvements in the last few years c. Can be a useful framework within which to compare a firm's costs with its competitors d. Can be a useful framework within which to compare a firm's profit margins with its competitors

*c. Can be a useful framework within which to compare a firm's costs with its competitors

The central task of a differentiation strategy is: a. To see how you can 'tweak' the product by adding new features that differentiate it from rival products b. To add valuable new features to your product so long as the extra value to customers exceeds the extra cost to you of supplying it c. To ask how all your customers' interactions with your product could be enhanced even more d, All of the above

*c. To ask how all your customers' interactions with your product could be enhanced even more

Porter's value chain: a. Can only be used to analyse cost leadership strategies b. Can be used to look at the current and additional costs of changes in a differentiation strategy c. Can be used to examine the current and additional service levels offered to customers in a differentiation strategy d. Answers b and c

*d. Answers b and c

52. A typical cost leadership strategy involves: @Pages and References: Pages 192-197 a. A firm producing a few limited-feature standard products, or providing a very standardised service b. A medium or small firm with minimal overheads, and cheaply acquired (sometimes second-hand) assets c. Answers a and b d. Being the firm with the highest market share, and, often, the best-known brand in the industry

c. Answers a and b

51. Being 'stuck in the middle' gives low profits because: @Pages and References: Pages 192-197 a. The firm loses those customers who want the lowest prices b. The firm loses those customers who want the best product on the market c. Employees become confused about what the firm's goals and strategy really are d. All of the above

d. All of the above

50. It is quite natural to combine cost leadership and differentiation strategies: @Pages and References: Pages 192-197 a. Into a strategy where you focus on doing both b. No: Porter says they are mutually exclusive c. If you do, you will probably end up being 'stuck in the middle' d. Answers b and c

d. Answers b and c

57. Overall, the Singapore Airlines case shows that: a. Firms do face the stark choices of being stuck in the middle that Porter cites b. Firms can create cultures that do motivate staff to continually eliminate waste, reduce costs and improve customer service c. Firms that create causal ambiguity cause creative ambiguity d. Cost leadership and low costs are the same thing

b. Firms can create cultures that do motivate staff to continually eliminate waste, reduce costs and improve customer service

55. The success of Japanese Total Quality Management: @Pages and References: Pages 192-197 a. Shows that it is possible to pursue Cost Leadership and Differentiation strategies simultaneously b. Refutes the perceived trade-off between low cost products and high quality products c. Has made Porter's analysis outdated d. Answers b and c

b. Refutes the perceived trade-off between low cost products and high quality products

53. A cost leadership strategy: @Pages and References: Pages 192-197 a. Requires a commodity product b. Requires a firm to commoditize their product - i.e. no frills - even if the industry's product is differentiable (e.g. cars or airlines) c. Can be achieved with a unique brand image d. Can only be achieved in the modern world by outsourcing to cheap-labor countries

b. Requires a firm to commoditize their product - i.e. no frills - even if the industry's product is differentiable (e.g. cars or airlines)