Question 1

Managers should not become complacent about efficiency-based cost advantages because:
A)both learning effects and economics of scale go on forever.
B)the experience curve is likely to bottom out at some point.
C)cost advantages gained from experience effects are not affected by the development of new technologies.
D)unit costs keep reducing as output increases.
E)the experience curve steadily rises after a certain threshold is reached indicating an increase in unit costs.

Accepted Answer

The experience curve is likely to bottom out at some point, meaning that efficiency-based cost advantages will eventually plateau and may no longer lead to further cost reductions. Managers should not become complacent and assume that cost advantages will continue to increase indefinitely.

Question 2

Although important,unfortunately,innovation plays a minor role in achieving competitive advantage.

Accepted Answer

Innovation plays a major role in achieving competitive advantage. Through innovation, businesses can create new products or services, improve existing ones, or find more efficient ways to operate, all of which can make a business more competitive.

Question 3

Strong brand loyalty leads to more sales and the ability to charge higher prices.

Accepted Answer

Strong brand loyalty means that customers are more likely to choose a specific brand over competitors, even if the price is higher. This leads to increased sales and the ability to charge higher prices because customers are willing to pay more for a brand they trust and are loyal to.

Question 4

The marketing strategy that a company adopts:
A)has little impact on the company's efficiency and cost structure.
B)aims at attaining superior efficiency of the company's operations.
C)should not take into account the impact the strategy has on the company's cost structure.
D)aims at automating much of the work in the production process.
E)refers to the position that the company takes with regard to a product's pricing and distribution.

Accepted Answer

The marketing strategy refers to the position that the company takes with regard to a product's pricing and distribution. A company's marketing strategy can have a significant impact on its sales revenue and profitability. It is important to consider the cost structure and efficiency of operations when developing a marketing strategy, but the primary focus should be on achieving the company's sales and revenue objectives.

Question 5

Poor positioning strategy arises when a company introduces a potentially attractive new product but sales fail to materialize in the marketplace.

Accepted Answer

Poor positioning strategy can result in failure to properly communicate the value and benefits of a product to the target audience, leading to low demand and poor sales even if the product has potential.

Question 6

Economies of scale are:
A)unit cost increases associated with learning effects.
B)unit cost reductions due to inferior quality of products.
C)realized when output is reduced to a minimum.
D)realized when the selling price is equal to the cost price of the products.
E)unit cost reductions associated with a large-scale output.

Accepted Answer

Economies of scale refer to the phenomenon where a company experiences a reduction in unit costs as production output increases. This is because fixed costs, such as capital investments and operating expenses, are spread over a larger production volume, resulting in lower unit costs. Hence, the best choice is E, which correctly describes economies of scale as unit cost reductions associated with large-scale output.

Question 7

Distinctive competencies shape the _____ strategies that a company can pursue.
A)business-level
B)functional-level
C)corporate-level
D)global-level
E)industry-level

Accepted Answer

The answer of Distinctive competencies shape the _____ strategies that...

Question 8

Learning effects are a result of:
A)automation.
B)knowledge acquired by doing.
C)sound product planning tactics.
D)diseconomies of scale.
E)outsourcing.

Accepted Answer

Learning effects occur when workers gain experience and expertise through repetition and practice. This leads to increased efficiency and productivity, often resulting in lower costs per unit produced. Automation, sound product planning tactics, diseconomies of scale, and outsourcing may all have an impact on costs, but they do not necessarily involve learning effects.

Question 9

Six Sigma encompasses the activities necessary to get inputs and components to a production facility,through the production process,and out through a distribution system to the end user.

Accepted Answer

Six Sigma primarily focuses on process improvement by reducing variability and defects in production and business processes, rather than encompassing the entire supply chain activities from input acquisition through production to distribution.

Question 10

Close integration between research and development (R&D),production and marketing can help a company avoid innovation failures.

Accepted Answer

Close integration between R&D, production and marketing can lead to better communication and understanding among different departments, enabling them to work together to create innovative products that are more likely to succeed in the market. This integration can also help identify potential problems early on and address them before the product is launched. Therefore, it can help a company avoid innovation failures.

Question 11

Self-managing teams:
A)are limited to only very large organizations.
B)require members to coordinate their own activities and make decisions.
C)typically increase the need for supervisors.
D)create a tall organizational structure.
E)show negligible increase in productivity and substantial decrease in product quality.

Accepted Answer

Self-managing teams require members to coordinate their own activities and make decisions without the need for constant supervision. This allows for more efficiency and flexibility in the organization. The other options are incorrect as self-managing teams can be used in organizations of any size, do not increase the need for supervisors, do not create a tall organizational structure, and can actually lead to increased productivity and product quality.

Question 12

Research suggests that the adoption of _____ may increase efficiency and lower unit costs relative to what can be achieved by the mass production of a standardized output.
A)just-in-time manufacturing
B)quick technology
C)flexible production technology
D)stable production
E)unscheduled manufacturing

Accepted Answer

Flexible production technology allows for customization and adaptation to changing market demands and customer needs, which can result in more efficient production processes and lower unit costs. Just-in-time manufacturing also has the potential to increase efficiency and lower costs, but it is not necessarily related to customization or adaptation. Quick technology and unscheduled manufacturing are not commonly used terms in the business world, and stable production may actually be less efficient and more costly in the long run due to the lack of flexibility.

Question 13

One of the primary roles of human resources in achieving superior efficiency is:
A)scheduling meetings among various value creation functions.
B)adopting aggressive marketing to ride down the experience curve.
C)designing products for ease of manufacture.
D)using information systems to automate processes.
E)implementing self-managing teams.

Accepted Answer

Implementing self-managing teams is a strategy that human resources can use to achieve superior efficiency. This approach empowers employees, encourages collaboration, and can lead to more innovative and efficient work processes.

Question 14

Poor commercialization occurs when there is definite customer demand for a new product,but the product is not well adapted to customer needs because of factors such as poor design and poor quality.

Accepted Answer

Poor commercialization occurs when there is a mismatch between customer demand and the product's design and quality. Therefore, there is a definite customer demand for the product, but it fails to meet their needs due to poor design and quality.

Question 15

Pay for performance based on individual accomplishment of goals tends to:
A)increase per-unit costs.
B)decrease employee productivity.
C)increase employee output.
D)have little effect on employee output.
E)facilitate teamwork.

Accepted Answer

Pay for performance based on individual accomplishment of goals creates a clear link between an employee's efforts and their compensation. This motivates employees to work harder and more efficiently, which tends to increase their output.

Question 16

Customer focus in a function of only the lower levels of an organization.

Accepted Answer

Customer focus should exist throughout all levels of an organization, from the lower levels to senior management.

Question 17

Self-managing work teams:
A)increase per-unit costs of manufactured items.
B)perform all workplace tasks except the making of hiring decisions.
C)increase the cycle time of manufacturing items.
D)require team members to learn only one task and specialize in that alone.
E)tend to increase productivity and product quality.

Accepted Answer

Self-managing work teams tend to increase productivity and product quality, as they are designed to have team members take on multiple roles and responsibilities, communicate and collaborate effectively, and continuously improve processes. They can also lead to greater job satisfaction and engagement among team members. None of the other options accurately describe the effects of self-managing work teams.

Question 18

The experience curve refers to the:
A)learning by doing technique.
B)company's overall experience in a particular industry.
C)systematic lowering of the cost structure and unit cost reductions.
D)diseconomies of scale caused by inexperienced workers.
E)increases in unit costs experienced over time.

Accepted Answer

The experience curve is the systematic lowering of the cost structure and unit cost reductions as a result of accumulated experience in a particular industry. It is based on the premise that as the cumulative production of a product or service doubles, the unit cost of production decreases by a fixed rate. This is due to factors such as improved processes, better utilization of inputs, and economies of scale.

Question 19

Production and materials-management functions need not be changed in response to unanticipated customer demands as they do not affect response time.

Accepted Answer

Unanticipated customer demands can lead to changes in production and materials-management functions in order to meet the new demand and ensure timely delivery.

Question 20

One of the primary roles of research and development in achieving superior efficiency is:
A)facilitating cooperation among functions.
B)limiting customer defection rates by building brand loyalty.
C)designing products for ease of manufacture.
D)instituting training programs to build skills.
E)implementing pay for performance.

Accepted Answer

Designing products for ease of manufacture can lead to streamlined and efficient production processes, and ultimately result in superior efficiency.

Quiz 4: Building Competitive Advantage Through Functional Level Strategies

Managers should not become complacent about efficiency-based cost advantages because:

Although important,unfortunately,innovation plays a minor role in achieving competitive advantage.

Strong brand loyalty leads to more sales and the ability to charge higher prices.

The marketing strategy that a company adopts:

Poor positioning strategy arises when a company introduces a potentially attractive new product but sales fail to materialize in the marketplace.

Economies of scale are:

Distinctive competencies shape the _____ strategies that a company can pursue.

Learning effects are a result of:

Six Sigma encompasses the activities necessary to get inputs and components to a production facility,through the production process,and out through a distribution system to the end user.

Close integration between research and development (R&D),production and marketing can help a company avoid innovation failures.

Self-managing teams:

Research suggests that the adoption of _____ may increase efficiency and lower unit costs relative to what can be achieved by the mass production of a standardized output.

One of the primary roles of human resources in achieving superior efficiency is:

Poor commercialization occurs when there is definite customer demand for a new product,but the product is not well adapted to customer needs because of factors such as poor design and poor quality.

Pay for performance based on individual accomplishment of goals tends to:

Customer focus in a function of only the lower levels of an organization.

Self-managing work teams:

The experience curve refers to the:

Production and materials-management functions need not be changed in response to unanticipated customer demands as they do not affect response time.

One of the primary roles of research and development in achieving superior efficiency is: