Deck 4: Operations Strategy

Question 1

Quality improvement initiatives generally increase market share in the long term and also increase profitability in the short term.

Answer 1

False

Question 2

Formal marketing research, such as surveys and focus groups, is the only useful approach to learn about customer needs and expectations.

Answer 2

False

Question 3

Customers generally perceive greater risk when buying goods than when buying services.

Answer 3

False

Question 4

The color and size of an iPod would be considered credence attributes.

Question 5

Eventually, order qualifiers become order winners.

Question 6

The ability to achieve market and financial superiority over competitors is called strategic planning.

Question 7

A clean bed in a hotel would be considered as an order satisfier.

Question 8

Apple's primary competitive priority would probably be innovation while Dell's would be flexibility.

Question 9

Southwest Airlines has gained competitive advantage by focusing on cost as a key competitive priority.

Question 10

Employee training is an example of a key competitive priority.

Question 11

The customer benefit package that a firm designs is meant to appeal to all customers.

Question 12

While it is generally difficult to change the structure of a value chain, operations managers can make strategic choices about technology and human resources.

Question 13

Operational capabilities must be built before a firm should identify competitive priorities.

Question 14

Traditional market research may not always provide accurate information about customer needs.

Question 15

Of the three types of attributes customers use to evaluate goods and services, goods are high in search attributes while services are high in experience and credence attributes.

Question 16

Being able to access the Internet in an automobile at any speed and in any location would be considered an order satisfier.

Question 17

Order satisfiers are new or innovative good or service features that customers do not expect.

Question 18

Order qualifiers are goods and service features and performance characteristics that differentiate one customer benefit package from another and win a customer's business.

Question 19

Improving design quality usually allows a firm to charge higher prices and thus increase revenue and profit.

Question 20

The ease by which one can create original music compositions using a software package such as Band in a Box or Apples' Garage Band would be an example of an experience attribute.

Question 21

A firm's ability to achieve market and financial superiority over its competitors is called

A)Operations strategy
B)Strategic planning
C)Competitive advantage
D)Competitive priority

Question 22

With regard to the three types of attributes customers use in evaluating the quality of goods and services, a vacation would best be classified as high in

A)Search attributes
B)Experience attributes
C)Credence attributes
D)Competitive advantage attributes

Question 23

In time sequence, which of the following needs to be accomplished first?

A)Understand customer wants and needs
B)Design and deliver customer benefit package
C)Build and leverage operational capabilities
D)Hire creative engineers

Question 24

In an automobile, which of the following would not be considered an order winner?

A)Self-parking capability
B)Voice-activated music system
C)Front-seat airbags
D)Collision-avoidance system

Question 25

Which one of the following statements in the Lawn Care Company (LCC) case study is true?

A)The LCC already had experience and capabilities in the residential lawn application service and market segment, and was considering using this expertise to enter the golf and park market segment.
B)The gross margin on grass seed and fertilizer were higher than on the lawn application service.
C)Service management skills play a major role in the LCC current strategy and vision of the business.
D)The order winner for the current strategy at LCC is high physical goods quality.

Question 26

Which of the following is not generally considered a competitive priority?

A)time
B)flexibility
C)innovation
D)infrastructure

Question 27

Innovation does not necessarily involve practical application or commercialization.

Question 28

Goods and service features that differentiate one customer benefit package from another are called

A)Order Qualifiers
B)Order Satisfiers
C)Order Exciters
D)Order Winners

Question 29

Using the Four Key Decision Loops in Professor Terry Hill's Generic Strategy Framework, which statement is true?

A)The four loops are highly integrated and require improvement cycles.
B)The first loop ties strategy to operations.
C)Operations has no input loop into corporate strategy or marketing strategy.
D)Infrastructure decisions must come before marketing strategy decisions.

Question 30

Core competencies are the strengths that are unique to an organization, such as a creative workforce or a strong supply chain.

Question 31

An operations strategy provides the direction on which corporate strategy is based.

Question 32

The infrastructure of an organization must support process choices and provide managers with timely and accurate information to make good decisions.

Question 33

Because McDonald's and Pal's Sudden Service are both in the quick service restaurant business, we would expect their operations strategies to be nearly identical.

Question 34

Reductions in flow time generally lead to a deterioration of quality.

Question 35

A flexibility strategy requires capacity for both design and demand flexibility.

Question 36

Requirements that are expected in a good or service are called

A)Order Qualifiers
B)Order Satisfiers
C)Order Exciters
D)Order Winners

Question 37

With regard to the three types of customer attributes in evaluating the quality of goods and services, those associated with buying furniture would best be classified as

A)search attributes
B)experience attributes
C)credence attributes
D)reflect attributes

Question 38

Professor Terry Hill's operations strategy framework provides a systems perspective of how operations is linked to corporate and marketing strategies.

Question 39

Because of the importance of supplying goods or services, operations strategy has historically received significant high-level management attention.

Question 40

In today's global market, mass customization has become less important than it was in the past.

Question 41

In regard to ways customers evaluate services compared to their evaluation of goods, which of the following is not true?

A)For services, customers seek and rely more on personal sources of information.
B)Customers normally adopt innovations in services faster.
C)Customers perceive greater risk when buying services.
D)Dissatisfaction with services is often the result of a customer's inability to properly perform or co-produce their part of the service.

Question 42

Which of the following would not constitute an element of operations infrastructure?

A)Market segmentation
B)Workforce
C)Quality control
D)Learning and innovation systems

Question 43

How do customers evaluate services differently from manufacturing, and what implications do these have for operations?

Question 44

Families of goods or services having similar characteristics or methods of creation are called

A)Core competencies
B)Corporate strategy
C)Strategic business units
D)Functional strategy

Question 45

Which one of the following statements best represents McDonald's approach to global business?

A)One brand cannot be all things to all people.
B)Extensive use of outside trainers
C)Using alternative technologies to make French fries
D)Use of primarily manual information systems

Question 46

With regard to the Lawn Care Company case study, explain how the (a) physical product (i.e., grass seed and fertilizer) and (b) lawn application service life cycles are related? What are the implications? You might also want to use a graph.

Question 47

Explain the difference between an order qualifier and an order winner.Provide some examples.

Question 48

With regard to the three types of customer attributes in evaluating the quality of goods and services, those associated with the features of a new laptop computer such as processor speed and hard disk capacity would best be classified as

A)search attributes
B)experience attributes
C)credence attributes
D)reflect attributes

Question 49

Professor Terry Hill has presented a four-loop framework for operations strategy through an iterative and integrated process.The initial loop is

A)Operations evaluates the implications of competitive priorities in terms of process choices and infrastructure
B)Operations determines if process choice decisions and capabilities are consistent with infrastructure capabilities
C)Operations input into corporate and marketing strategy
D)Ties together corporate strategy and marketing strategy

Question 50

Considering the work force component of infrastructure, which term does not fit with the others in a service environment?

A)Customer contact skills
B)Cross-training
C)Task-oriented
D)Empowered

Question 51

Regarding quality, which statement is not true?

A)Businesses offering premium quality goods usually have larger market share and are early entrants into their market.
B)Quality is positively and significantly related to higher return on investment for almost all kinds of market situations.
C)A strategy of quality improvement usually leads to increased market share but at a cost in terms of reduced short-run profits.
D)High goods quality producers can usually excel by charging low prices.

Question 52

The ____ of a firm defines the strengths that are unique to that organization.

A)strategy development
B)strategic mission
C)vision statement
D)core competencies

Question 53

____ attributes are most likely to be experienced by the customer when using estate planning services.

A)Search attributes
B)Experience attributes
C)Credence attributes
D)Order winners

Question 54

Which of the following does not describe how customers evaluate services in a manner that differs from the way they evaluate goods?

A)Customers rely on more information from personal sources.
B)Customers perceive greater risks.
C)Customers cannot form a priori expectations of expected service quality.
D)Dissatisfaction often results from a customer's inability to properly co-produce the service.

Question 55

Which one of the following statements is true with respect to McDonald's operations and strategy?

A)The #1 competitive priority is demand flexibility.
B)Prof.Terry Hill's strategy framework cannot be applied to services such as McDonald's.
C)There is only one standardized way (process) to make French fries in over 30,000 stores worldwide.
D)McDonald's vision is to produce the world's best hamburger.

Question 56

With regard to the three types of customer attributes in evaluating the quality of goods and services, those associated with having a meal in a restaurant such as taste of the food and courtesy of the server would best be classified as

A)search attributes
B)experience attributes
C)credence attributes
D)reflect attributes

Question 57

What do managers need to understand in order to create a sustainable competitive advantage?

Question 58

Explain the concept of search, experience, and credence attributes.

Question 59

Operations design choices include all of the following except

A)Operating plans and controls
B)Type of processes
C)Value chain integration and outsourcing
D)Inventory and service capacity

Question 60

The text uses McDonald's to exemplify Professor Terry Hill's Generic Strategy Framework.The operating design choices of resource scheduling, inventory placement and control and standardized operational and job procedures relate best to the corporate objective of

A)Profitable growth
B)Operational excellence
C)Leverage strengths through innovation and technology
D)Diversity

Question 61

What is the difference between corporate, business and functional strategy?

Question 62

Explain Professor Hill's strategy development framework.What are the key elements of operations strategy within this framework?

Question 63

Is it possible for a world-class organization to achieve superiority in all five major competitive priorities - price (cost), quality, time, flexibility and innovation? Explain.Justify.Provide examples pro or con.

Question 64

What are competitive priorities? Provide some examples of how OM influences the five major types of competitive priorities.

Question 65

What do we mean by core competencies?