Question 1

During which step of value chain analysis will the company discover whether or not it has a cost advantage,and why?
A)During the first step,when the value-chain activities are identified.
B)During the first step,when the cost driver(s)are identified.
C)During the second step,when the firm develops a competitive advantage by either reducing cost or adding value.
D)The entire purpose of value chain analysis is to determine if the company has a cost advantage;therefore,it occurs in all steps.
E)In the third step,when the company adopts and implements the balanced scorecard.

Accepted Answer

The second step of value chain analysis involves identifying cost drivers and determining the costs associated with each activity. It is during this step that the company will discover whether or not it has a cost advantage over its competitors. If the firm is able to reduce costs or add value in a more efficient manner than its rivals, it will have a cost advantage. Therefore, option C is the correct choice.

Question 2

A firm has decided to use the balanced scorecard.Which of the following is not an advantage the company will gain by using the balanced scorecard?
A)It links the firm's CSFs to its strategy.
B)It helps the firm monitor progress to achievement of its strategic goals.
C)It can provide a basis for implementing strategic changes desired by the firm.
D)It provides a comprehensive financial overview of the firm.
E)It helps to coordinate activities in the firm.

Accepted Answer

The balanced scorecard is a strategic performance management tool which helps organizations to align their business activities with the vision and strategy of the organization, improve communication among different departments, and monitor performance towards the strategic goals. While the balanced scorecard may provide financial information, it is not primarily designed to provide a comprehensive financial overview of the firm. Therefore, choice D is not an advantage that the company will gain by using the balanced scorecard.

Question 3

The cause and effect relationships among critical success factors are best captured in:
A)The balanced scorecard
B)Business intelligence
C)The value chain
D)The strategy map
E)SWOT analysis

Accepted Answer

The strategy map is the best choice for capturing cause and effect relationships among critical success factors. It provides a visual representation of how various components of an organization's strategy are connected and how they contribute to achieving the overall objectives. This tool is often used in conjunction with the balanced scorecard to ensure alignment between strategy and performance measures. Business intelligence and the value chain are useful for analyzing various aspects of an organization's operations but do not focus on cause and effect relationships among critical success factors. SWOT analysis identifies an organization's strengths, weaknesses, opportunities, and threats but does not capture cause and effect relationships among critical success factors.

Question 4

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by:
A)Placing greater emphasis on the value chain.
B)Moving to an emphasis on upstream activities in the value chain.
C)Moving to an emphasis on downstream activities in the value chain.
D)Identifying most profitable customers.
E)Finding low-cost manufacturing locations.

Accepted Answer

The answer of It is becoming more common to see...

Question 5

During the strengths and weaknesses portion of a firm's SWOT analysis,which of the following would not be discovered?
A)The firm's method of product distribution was not very efficient.
B)Through continued research and development,the firm's products were state-of-the-art.
C)Due to a lack of barriers to entry into the industry,several new competitors were beginning to enter the market.
D)The production process needed to be reengineered to reduce unnecessary scrap.
E)The firm's employees are trained in new manufacturing methods each month.

Accepted Answer

The presence of new competitors entering the market would typically be discovered during the opportunities or threats portion of the SWOT analysis rather than the strengths and weaknesses portion. The strengths and weaknesses portion typically focuses on internal factors within the firm. Choices A, B, D, and E are all examples of factors that would likely be discovered during the strengths and weaknesses portion of the analysis.

Question 6

In SWOT analysis,strengths and weaknesses are most easily identified by looking:
A)At the firm as a potential customer.
B)Inside the firm at its specific resources.
C)At the firm's competition.
D)At the firm's product.
E)Outside the firm from a consultant's perspective.

Accepted Answer

Strengths and weaknesses are internal factors, so they are best identified by examining the firm's specific resources and capabilities. Looking at the firm as a potential customer or at its competition would not provide as much insight into its internal strengths and weaknesses. Examining the firm's product may provide some information about its strengths, but weaknesses would still need to be identified through a closer examination of internal resources. Looking from a consultant's perspective may provide some valuable insights, but it is still important to look at internal factors to fully understand a firm's strengths and weaknesses.

Question 7

Which one of the following is not usually included as a perspective of the balanced scorecard?
A)Financial Performance.
B)Financial Reporting.
C)Learning and Growth.
D)Customer Satisfaction.
E)Internal Business Processes.

Accepted Answer

Financial reporting is not usually included as a perspective of the balanced scorecard. The balanced scorecard typically includes four perspectives: financial performance, customer satisfaction, internal business processes, and learning and growth. Financial reporting is a separate function that provides information and analysis on the financial performance of an organization but is not a perspective of the balanced scorecard.

Question 8

When a firm is determining its opportunities and threats,which of the following would not be mentioned?
A)An intense rivalry with a local competitor was beginning to start a price war.
B)The firm just received a patent on its main product.
C)The success of the firm's latest marketing campaign.
D)In spite of its patent,there are several substitute products consumers could use.
E)Increased efficiency in the manufacturing process.

Accepted Answer

The success of the firm's latest marketing campaign is an internal strength or opportunity, not an external threat or opportunity. The other options all are external factors that could affect the firm's success.

Question 9

Which one of the following critical success customer factors is best measured by warranty expense?
A)Quality.
B)Dealer and distributor efficiency and effectiveness.
C)Timeliness of delivery.
D)Customer satisfaction.

Accepted Answer

Warranty expense is a measure of quality, as it reflects the costs associated with repairing or replacing faulty products. High warranty expenses indicate that the product is not meeting quality standards and is resulting in a higher cost for the company. Therefore, measuring warranty expense can provide insights into the critical success factor of quality. The other choices are better measured by other metrics; dealer and distributor efficiency and effectiveness can be measured by sales volume or customer retention rates, timeliness of delivery can be measured by on-time delivery rates, and customer satisfaction can be measured through surveys or customer feedback.

Question 10

The balanced scorecard can be made more effective by developing it at a detail level so that employees:
A)Can see how it is put together.
B)Appreciate all the effort that goes into its preparation.
C)Respect management for including them in its formulation.
D)Can see how their actions contribute to the success of the firm.
E)Do not feel left out.

Accepted Answer

By developing the balanced scorecard at a detail level, employees can see how their individual actions and contributions are linked to the success of the company. This not only helps them understand the importance of their role but also creates a sense of ownership and accountability towards achieving the desired outcomes.

Question 11

Which of the following does not represent a possible opportunity for a manufacturing firm as a part of SWOT analysis?
A)Demographic trends.
B)Technological advances in the industry.
C)An efficient process developed by our firm for manufacturing a product.
D)Changes in regulation of the industry.
E)Changes in the economic environment facing all industries.

Accepted Answer

An efficient process developed by our firm for manufacturing a product is not an opportunity, but rather an internal strength that can be leveraged. Opportunities relate to external factors. The other options are all external factors that can create opportunities for a manufacturing firm.

Question 12

The balanced scorecard:
A)Is not comprehensive,since it doesn't include all the CSFs which contribute to competitive success.
B)Helps focus managers' attention to bottom line profits.
C)Is forward looking,stressing nonfinancial measures that can lead to benefits in the future.
D)Fails to reflect environmental and social effects of the firm's operations.
E)Is heavily weighted toward the financial critical success factors (CSFs).

Accepted Answer

The balanced scorecard is forward-looking and focuses on nonfinancial measures that can lead to future benefits, such as customer satisfaction and product innovation.

Answer: D
 The balanced scorecard fails to reflect environmental and social effects of the firm's operations. This has led to the development of the sustainability balanced scorecard, which takes into account environmental and social impacts.

Therefore, the correct answer is C and D.

Question 13

The Euro is:
A)A combination of European nations that cooperate on economic and trade matters.
B)A version of Disney World located near Paris.
C)A currency used in many European countries.
D)A currency used in all European countries.

Accepted Answer

The Euro is a currency used in many European countries.

Question 14

The main objective of value chain analysis is to identify stages of the value chain where the firm can:
A)Justify increases in the price of the product or service.
B)Increase value to the customer or reduce cost in some way.
C)Outsource production to other producers.
D)Improve efficiency.

Accepted Answer

The main objective of value chain analysis is to identify stages where the firm can increase value to the customer or reduce cost in some way. This can be achieved through various methods such as improving quality, enhancing delivery speed, reducing costs, etc. Justifying increases in the price of the product or service may be a result of increasing value, but it is not the main objective of value chain analysis. Outsourcing production or improving efficiency may also be potential outcomes of analysis, but they are not the main objectives themselves.

Question 15

In SWOT analysis,opportunities and threats are identified by:
A)Consultation with middle management.
B)Talking with the rank and file workers.
C)Looking outside the firm.
D)Brainstorming techniques.
E)Reviewing our corporate strategy.

Accepted Answer

Opportunities and threats in SWOT analysis are identified by looking outside the firm, analyzing the industry trends, market developments, competitor actions, and regulatory changes. Therefore, Option C is the correct choice. Option A and B may provide some inputs, but they are not sufficient to capture the big picture. Option D may be used to generate ideas, but they need to be evaluated against external factors. Option E is not relevant to identifying opportunities and threats.

Question 16

Which of the following best describes the type of information that cost management must provide that is important for the success of the organization?
A)Information of a record keeping nature.
B)Reported financial information.
C)Reported nonfinancial information.
D)Information that addresses the strategic objectives of the organization.
E)Long-term planning information.

Accepted Answer

Cost management must provide information that addresses the strategic objectives of the organization because it helps in identifying areas for cost reduction, process improvements, and strategic decision making. It is important to ensure that cost management decisions align with the overall strategic direction of the organization. While record keeping, reported financial and nonfinancial information, and long-term planning information are important, they may not necessarily be directly related to the success of the organization if they do not align with the strategic objectives.

Question 17

After critical success factors (CSFs)have been identified,the next step in developing a competitive strategy is to develop relevant and reliable measures for these CSFs.These measures are important to help the organization:
A)Make profit for any extended period.
B)Increase sales above previous year(s).
C)Develop policies to enhance customer profitability.
D)Improve productivity in selected product areas.
E)Monitor progress toward achieving strategic goals.

Accepted Answer

The development of measures for CSFs is important to monitor progress towards achieving strategic goals. This allows the organization to make informed decisions and adjustments to its strategy as needed in order to achieve its goals. While improving productivity or enhancing customer profitability may also be important goals, the development of measures for CSFs is primarily focused on monitoring progress towards strategic goals. Making consistent profit or increasing sales may also be important goals but are not directly related to the development of measures for CSFs.

Question 18

With regard to critical success factors,which one of the following would not be considered a financial measure of success?
A)Cash flow.
B)Growth in industry productivity.
C)Sales growth.
D)Earnings growth.
E)Reduction in the cost of inventory.

Accepted Answer

Growth in industry productivity is a measure of operational efficiency, rather than a financial measure. Cash flow, sales growth, earnings growth, and reduction in the cost of inventory are financial measures of success.

Question 19

The declining value of the U.S.dollar relative to other currencies in recent years means that:
A)U.S.exporters will face a greater challenge in exporting U.S.-made products.
B)U.S.firms will be eager to buy foreign products.
C)U.S.firms will be less profitable.
D)U.S.exporters will have a temporary advantage over other countries in foreign trade.

Accepted Answer

A declining U.S. dollar makes U.S. goods cheaper for foreign buyers, giving U.S. exporters a temporary advantage in foreign trade.

Question 20

A local pharmaceutical firm has just announced its discovery of a revolutionary new drug for dieting.However,due to its deteriorating relationship with its union,the unionized portions of the company's employees have threatened to strike.In addition,the company's stock has started to drop due to the firm's difficulty in paying off some of its debt.In this example,what was the firm's core competency(ies)?
A)Its research and development.
B)Its human resources abilities.
C)Its financing activities.
D)Its operating activities.

Accepted Answer

The firm's core competency appears to be in its research and development, as evidenced by its announcement of a revolutionary new drug. The other issues mentioned, such as difficulties with the union and debt payment, do not necessarily indicate competencies of the firm.

Quiz 2: Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

During which step of value chain analysis will the company discover whether or not it has a cost advantage,and why?

A firm has decided to use the balanced scorecard.Which of the following is not an advantage the company will gain by using the balanced scorecard?

The cause and effect relationships among critical success factors are best captured in:

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by:

During the strengths and weaknesses portion of a firm's SWOT analysis,which of the following would not be discovered?

In SWOT analysis,strengths and weaknesses are most easily identified by looking:

Which one of the following is not usually included as a perspective of the balanced scorecard?

When a firm is determining its opportunities and threats,which of the following would not be mentioned?

Which one of the following critical success customer factors is best measured by warranty expense?

The balanced scorecard can be made more effective by developing it at a detail level so that employees:

Which of the following does not represent a possible opportunity for a manufacturing firm as a part of SWOT analysis?

The balanced scorecard:

The Euro is:

The main objective of value chain analysis is to identify stages of the value chain where the firm can:

In SWOT analysis,opportunities and threats are identified by:

Which of the following best describes the type of information that cost management must provide that is important for the success of the organization?

After critical success factors (CSFs) have been identified,the next step in developing a competitive strategy is to develop relevant and reliable measures for these CSFs.These measures are important to help the organization:

With regard to critical success factors,which one of the following would not be considered a financial measure of success?

The declining value of the U.S.dollar relative to other currencies in recent years means that: