Question 1

The value chains of company distribution channel partners are relevant because:

Accepted Answer

All of these factors apply. The costs and margins of distribution channel partners are ultimately reflected in the price paid by the end consumer, so they have a direct impact on profitability. Additionally, the activities performed by partners can impact sales and customer satisfaction, which also affect the success of the overall value chain. Finally, because partners may have competing interests, it is important to incentivize them to work towards higher sales volumes and customer satisfaction to ensure the success of the entire chain.

Question 2

Costs and price differences among competing companies can have origins in activities performed by:

Accepted Answer

While factors such as the length of a company's value chain may play a role in costs and pricing, the most significant origin of cost differences among competing companies is likely to be the costs in the company's own value chain as well as the costs in the value chains of its suppliers and distribution channel allies. This is because costs incurred at any point in a value chain can impact the overall cost structure of a company and may ultimately be reflected in its pricing decisions. Therefore, option D is the best choice as it highlights the importance of both the company's own value chain and those of its suppliers and distribution channels in determining costs and price differences.

Question 3

An option for NOT remedying an internal cost disadvantage includes:

Accepted Answer

Investing in best practices is a remedy for internal cost disadvantages, not an option for NOT remedying them.

Question 4

Which of the following is NOT an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)?

Accepted Answer

Insisting on across-the-board cost cuts in all value chain activities is not a feasible option, as it may not necessarily address the specific cost disadvantage associated with activities performed by forward channel allies. It is important to identify and target the specific activities that are causing the cost disadvantage and find a more targeted solution. The other options listed provide feasible solutions for remedying a cost disadvantage associated with activities performed by forward channel allies.

Question 5

A company that does a first-rate job of managing its value chain activities relative to competitors:

Accepted Answer

A company that manages its value chain activities well relative to competitors is likely to have a competitive advantage, which in turn can lead to higher profits. Effective management of value chain activities can result in cost savings, increased efficiency, and higher quality products or services, which can all contribute to a company's success.

Question 6

Which of the following is NOT an option for remedying a supplier-related cost disadvantage?

Accepted Answer

The answer of Which of the following is NOT an...

Question 7

Value chain analysis and benchmarking in comparison to that of rivals:

Accepted Answer

Value chain analysis and benchmarking help a company identify areas where they can improve their operations and gain a competitive advantage by comparing themselves to their rivals. This allows the company to strengthen their position in the market and differentiate themselves from their competitors.

Question 8

To improve the effectiveness of its value proposition and enhance differentiation,firms must adopt certain approaches except:

Accepted Answer

The adoption of outsourcing capabilities may help firms reduce costs and add value to their offerings. However, it is not a unique approach to improve the effectiveness of the value proposition or enhance differentiation. The other choices (implementing quality improvement, adopting innovation, reallocating resources, and adopting best practices for marketing and brand management) are all essential actions to enhance the value proposition and differentiation of the firm's offerings.

Question 9

A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is:

Accepted Answer

Benchmarking is the process of comparing a company's performance metrics and practices against those of other companies with similar functions or activities. This allows companies to identify areas for improvement and implement best practices. It considers both cost and effectiveness, making it a potent managerial tool for decision-making.

Question 10

Benchmarking provides a company with which of the following?

Accepted Answer

Benchmarking is a tool used by companies to measure their performance against industry standards and best practices. Through this process, companies are able to gain hard evidence of cost competitiveness, helping to identify areas for improvement and reduce costs. It does not necessarily provide proof of resource availability, a company strategy, verification of total cost ownership, or improvements to internal processes.

Question 11

The most difficult part of benchmarking is:

Accepted Answer

The answer of The most difficult part of benchmarking is:
...

Question 12

Which of the following areas within a company's total value chain system can managers use to improve efficiency and effectiveness?

Accepted Answer

Managers can improve efficiency and effectiveness by focusing on a company's own internal activity segments, the suppliers' part, and the forward (distribution) channel portion of the value chain system. By optimizing these areas, managers can reduce costs, improve quality, and enhance customer value. Reinforced activities identified as efficiency measures (B) and comparative disadvantages schedule identified with benchmarking practices (C) can also be useful tools, but they are not areas within the total value chain system that managers can directly control and improve. Therefore, option A is the best choice.

Question 13

The means to enhance differentiation through activities at the forward end of the value chain system include:

Accepted Answer

The answer of The means to enhance differentiation through activities...

Question 14

Which of the following is NOT one of the objectives of benchmarking?

Accepted Answer

While benchmarking may be used to help construct a company's value chain, it is not one of the primary objectives of benchmarking. The other objectives listed are all key objectives of benchmarking.

Question 15

Determining whether a company's overall prices and costs are competitive requires an entire value chain analysis,which typically demands:

Accepted Answer

Determining whether a company's overall prices and costs are competitive requires an entire value chain analysis, which involves looking at the costs of a company's competitively relevant suppliers and forward channel allies, considering the costs of a company's internally performed activities, using benchmarking the costs in a company's value chain system against the costs of the value chain systems employed by rival firms, and using activity-based cost accounting. Therefore, all of these options are required for a comprehensive analysis of a company's overall prices and costs competitiveness.

Question 16

A company's strategic options for remedying cost disadvantages in internally performed value chain activities do not include:

Accepted Answer

Switching to activity-based costing is not a strategic option for remedying cost disadvantages in internally performed value chain activities. Activity-based costing is a cost accounting method that helps companies understand the actual cost of their products or services by identifying the specific activities that go into producing them and then assigning costs to those activities. While this information can be useful for strategic decision making, it is not a solution for reducing costs in the value chain activities themselves.

Question 17

The options for remedying a supplier-related cost disadvantage include:

Accepted Answer

Option A provides multiple solutions for remedying a supplier-related cost disadvantage without drastically changing the business strategy. By working closely with suppliers to identify mutual cost-saving opportunities and negotiating for more favorable prices, the firm can maintain its current cost leadership strategy. Additionally, switching to lower-priced substitute inputs can also help reduce costs without completely changing the products or services offered by the firm. Instituting forward vertical integration, shifting into production of substitute products, or cutting selling prices could require significant changes to the business strategy and may not be the optimal solution for remedying a supplier-related cost disadvantage.

Question 18

Benchmarking involves:

Accepted Answer

Benchmarking involves comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities. This is done to identify areas where a company may be able to improve its own performance by adopting best practices from other companies.

Question 19

Obtaining cost information is a primary difficulty associated with benchmarking.The following are typical sources for collecting information,except:

Accepted Answer

All the options listed are typical sources for collecting benchmarking information, so none of them is an exception.

Question 20

Which of the following is NOT a good option for trying to remedy high internal costs vis-à-vis rivals' firms?

Accepted Answer

Option C, implementing aggressive strategic resource mapping to permit across-the-board cost reduction is not a good option for trying to remedy high internal costs vis-à-vis rivals' firms because it is too broad and may not necessarily address the specific areas where costs are high. Options A, B, D, and E are all viable options that can specifically target the areas where costs are high and bring them down to be more competitive with rival firms.

Quiz 4: Evaluating a Companys Resources, Capabilities, and Competitiveness