Deck 2: Service Strategy

Question 1

A firm facing serious competition for the first time is in the journeyman stage of a service firm's competitiveness.

Answer 1

True

Question 2

Quality is considered to be a structural element of the strategic service concept.

Answer 2

False

Question 3

American Airlines' early development of the SABRE reservation system became the foundation for its yield management innovation.

Answer 3

True

Question 4

Ordering from L.L. Bean by telephone is an example of a service firm maximizing opportunities for economies of scale.

Question 5

Service winners are the competitive dimensions used by customers to decide among qualified service providers.

Question 6

On-line networks between suppliers and their customers create a barrier to entry.

Question 7

Information is a substitute for inventory.

Question 8

Information databases are an asset, because they represent a source of revenue.

Question 9

When pursuing a differentiation strategy, a service firm should work to ensure that the service being offered is standardized.

Question 10

Focus is a competitive strategy that creates a service perceived as being unique.

Question 11

A characteristic of the overall cost leadership strategy is the incurring of start-up losses to build market share.

Question 12

A cost-leadership strategy often involves customizing a standard service.

Question 13

Service industries have low entry barriers because economy-of-scale opportunities are limited.

Question 14

The use of micromarketing has the potential to create customer concerns about invasion of privacy.

Question 15

Information technology can be used to promote customer loyalty.

Question 16

The IRS has identified frequent-user programs as anti-competitive.

Question 17

Implementing a low-cost strategy can sometimes revolutionize an industry.

Question 18

Service encounter, quality, information, and capacity planning are all managerial elements of a strategic service concept.

Question 19

Selling information and developing new services are examples of the role that information technology plays in generating revenue.

Question 20

The competitive dimension of dependability is a likely candidate for becoming a service loser.

Question 21

Scalability is a measure of how unit variable cost relates to transaction volume.

Question 22

A difficult economic environment exists for service industries for all but one of the following reasons.

A) Relatively high overall entry barriers
B) Product substitution
C) Minimal opportunities for economies of scale
D) Exit barriers.

Question 23

The qualifier for an airline offering short commuter flights is:

A) quality of the meals.
B) safety record.
C) politeness of the crew.
D) on-time performance.

Question 24

Firms classified as "available for service" view quality improvement efforts with disdain.

Question 25

Which of the following is not identified as a strategy common to many successful service providers?

A) Close coordination between the marketing and operations
B) The exploitation of information to generate new business
C) A project-oriented organizational structure
D) Redirection of the strategic service vision inward to focus on employees

Question 26

Infinite scalability can occur only when the variable cost is zero.

Question 27

A personal training facility that is located in the exclusive Beverly Hills area with only one other competitor could adopt a service strategy that emphasizes ________.

A) overall cost leadership
B) differentiation
C) focus
D) personalization

Question 28

SWOT analysis is objective with easily agreed upon results.

Question 29

In a world-class service firm, the front-line management controls the process.

Question 30

Customers seldom take note of firms that are leaders in the sustainability movement.

Question 31

World-class service operations strive to replace workers with enhanced automation.

Question 32

A highly scalable firm such as Kelly Blue Book (kkb.com) requires a call center.

Question 33

The job design premise in a world-class service organization is division of labor.

Question 34

Recycling paper and reducing energy usage often is the first step towards sustainability.
Multiple Choice

Question 35

Which of the following usually is not a good idea with respect to an overall cost leadership strategy?

A) Offer as many different services as possible to spread overhead costs.
B) Concentrate on routine/standardized services.
C) Replace labor with capital where possible.
D) Perform some service activities off-line at a centralized site.

Question 36

Of the nine dimensions of service competition, three are regarded as most likely to become service losers. Which of the following is not one of those three vulnerable dimensions?

A) Speed
B) Price
C) Dependability
D) Personalization

Question 37

For a firm achieving "journeyman" competitive status, the back-office function is considered an activity that plays an important role in service delivery.

Question 38

Scalability is enhanced with self-service.

Question 39

Porter's five forces analysis is used at the industry level to determine competitive intensity.

Question 40

Healthcare is an example of a service that exhibits high scalability.

Question 41

Which of the following is not considered a criterion for evaluating the triple bottom line?

A) social progress
B) economic growth
C) environmental stewardship
D) market share

Question 42

Not satisfied with just meeting customer expectations, this category of service firms expands upon the expectations to levels that competitors find difficult to meet.

A) Available-for-service
B) Journeyman
C) Distinctive competence achieved
D) World class service delivery

Question 43

Real-time information technologies that have a focus on internal operations can play a competitive role in increasing revenue opportunities. Which one of the following uses of information does not play a role in generating revenue?

A) Yield management
B) Point of sale
C) Expert systems
D) Sale of information

Question 44

Which one of the following does SWOT analysis not have as its aim?

A) Reveal competitive advantages
B) Determine the competitive intensity
C) Analyze prospects
D) Development of contingency plans

Question 45

Which one of the following is not a dimension of scalability?

A) Information vs. goods content
B) Degree of self-service
C) Cost of after-sales service
D) Shipping and handling costs

Question 46

Kraft targeted its cream cheese flavors to match the tastes of a store's customers using off-line analysis of POS (point-of-sale) data. This is an example of:

A) yield management
B) expert systems
C) data envelopment analysis
D) micromarketing

Question 47

Which of the following is an example of the competitive use of information in generating revenue?

A) Reservation systems
B) Data envelopment analysis
C) Micromarketing
D) Expert systems

Question 48

Porter's five forces analysis does not include which one of the following considerations.

A) Pricing power
B) Potential new entrants
C) Threat of substitutes
D) Bargaining power of suppliers

Question 49

Bar coding and checkout scanner technology have created a wealth of consumer buying information that can be used to target customers with precision. This process is an example of:

A) service development.
B) micromarketing.
C) data envelopment analysis.
D) point of sale.

Question 50

The nature of the service act depends on to whom or to what the service is directed and the degree of "tangibility" of the service provided. An example of a tangible service directed to the possessions of a customer would be:

A) a stay in a hotel.
B) an investment advising session.
C) a fortune telling session.
D) a full-service car wash.

Question 51

American Airlines' SABRE reservation system fills the following strategic role of information:

A) Revenue generation
B) Productivity enhancement
C) Creation of barriers to entry
D) Data base asset

Question 52

Services can create barriers to entry by __________

A) using economies of scale.
B) creating switching costs.
C) using databases and information technology.
D) all of the above.

Question 53

Which of the following is not a role of information technology?

A) Creating a barrier to entry for competitors
B) Generating revenues
C) Displacing workers
D) Managing multisite operations

Question 54

Which of the following stages of a firm's competitiveness describes customers who seek out a firm based upon its sustained reputation for meeting customer expectations?

A) Available-for-service
B) Journeyman
C) Distinctive competence achieved
D) World class service delivery

Question 55

In which of the following cases does the use of information raise ethical issues?

A) Yield management
B) Selling information
C) Micromarketing
D) All of the above

Question 56

Which one of the following is not a key characteristic that leads to a difficult competitive environment for service industries?

A) Low barriers to entry
B) Lack of sustainable competitive advantage
C) Lack of government regulation and oversight
D) Low switching costs for customers

Question 57

Using the dimensions of strategic focus and competitive use of information can identify four strategic roles of information. Which of the following is not a strategic role of information?

A) Create barriers to entry.
B) Generate revenue.
C) Create a data base asset.
D) Provide global communications.

Question 58

Which of the following service quality descriptions would be considered "World Class?"

A) It raises the customer's expectations and improves continuously.
B) It exceeds the customer's expectations and is consistent on many dimensions.
C) It is less important than cost and is highly variable.
D) It contributes to service and plays an important role in total service.

Question 59

The innovation of moving from a "country" store where the proprietor fills the shopper's list with items that are kept behind the counter to a self-service supermarket where the shopper fills a cart with items represents a move between which of the following pairs of competitive stages?

A) From available-for-service to journeyman
B) From available-for-service to distinctive competence achieved
C) From journeyman to distinctive competence achieved
D) From distinctive competence achieved to world class service delivery