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Bus 478 > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

Why are functional level strategies important

A

They are actions that managers take to improve efficiency and effectiveness of one or more value creation activities

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2
Q

How do we measure efficiency

A

The quantity of inputs that it takes to produce a given output

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3
Q

How does a more effiencient company look like

A

Has fewer inputs to produce the output leading to a lower cost structure

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4
Q

What are the functional strategies?

A
  1. Efficiency
  2. Quality
  3. Innovation
  4. Customer Responsiveness
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5
Q

What is innovation?

A

The most important source of competitive advantage because it brings new products that better statisfy consumer needs, improve the quality and reduce costs `

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6
Q

What happens when innovation becomes successful

A

Success new product launches are major drivers of superior

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7
Q

What are the reasons for failure?

A
  1. Demand of innovations is inherently uncertain
  2. The technology is poorly commercialized
  3. Poor positioning strategy
  4. Marketing a technology for which there is not enough demand
  5. When products are slowly marketed
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8
Q

Why is tight integration between R&D, production and marketing important

A
  1. Product development projects driven by customer needs
  2. New products are designed for ease of manufacture
  3. Development costs are not allowed to spiral out of control
  4. The time it takes to develop a product and bring it to market is minimized
  5. Close integration between R&D and marketing is achieved to ensure that development projects are driven by customer needs
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9
Q

What are the 2 advantages that superior quality provide

A
  1. Strong reputation for quality
  2. Different from rivals
  3. Create more value in the eyes of customers
  4. Provide options of charging at a premium prince
  5. Eliminates errors from the production process
  6. Reduces wastes
  7. Increases efficiency
  8. Lower the cost structure
  9. Increases its profitability
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10
Q

What is the principal tool that most managers use to increase the reliability of their products

A

Six sigma quality improvement methods

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11
Q

What is the total quality management

A

Philosophy that was widely adopted during the 1980s and early 1990s

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12
Q

How do managers implement a reliability improvement program

A
  1. Managers must be committed to the program
  2. Individuals must identified to lead the program
  3. The need to identify defects, trace them to their source, find out what caused the defect and make necessary corrections
  4. Create a metric that can be used to measure quality
  5. Set a challenging quality goal and create incentives to reach it
  6. Shop-floor employees must participate in the program
  7. Must work with suppliers to improve parts they supply
  8. Design products with fewer parts to prevent further mistakes
  9. Implementation requires company wide commitment and cooperation
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13
Q

How can be products be differentiated

A

By attributes that define product excellence

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14
Q

What are some key attributes

A
  1. The form
  2. The features
  3. Performance
  4. Durability
  5. Styling
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15
Q

How do managers improve the quality and see their products as superior to that of their rivals

A
  1. Managers must collect marketing intelligence to indicate the attributes that are important to customers
  2. Company needs to design products in a way where these attributes are embodied in the product
  3. The company must decide which attributes to promote and how best to position them in the minds of the customers
  4. Competition is not stationary, a company must continue to produce improvement in product attributes
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16
Q

How do managers achieve superior responsiveness

A

They must give customers what they want, when they want it and a price they are willing to pay

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17
Q

What does superior responsiveness mean

A

Giving customers value for money

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18
Q

How do you build superior responsiveness

A

Motivate the entire company to focus on the customer

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19
Q

How do managers motivate the entire company to focus on the customer

A
  1. Demonstrate leadership
  2. Shaping employee attitudes
  3. Using mechanisms for making sure that the needs of the customers are well known within the company
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20
Q

How can a company provide a higher level of satisfaction

A
  1. Customizing them to the requirements of individual customers
  2. Reducing the time it takes to respond to or satisfy customer needs
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21
Q

What does customization mean

A

Customize products to a greater extent to satisfy customers

22
Q

How can managers satisfy customer demands for rapid response

A
  1. Building brand loyalty
  2. Differentiating its products
  3. Charging high prices for its products
23
Q

What does achieving superior efficiency look like

A
  1. The fewer the inputs required to product an output and has a lower cost structure
  2. The higher its productivity, the lower its costs in contrast to its rivals
24
Q

What is economies of scale

A
  1. Unit cost reduction associated with a large scale of output
  2. Companies benefit by keeping prices down and increasing volume
25
Q

What does achieving a greater division of labour and specialization mean

A

Enables employees to become very skilled at performing a particular task

26
Q

What does learning effects mean

A

Cost savings that come from learning by doing

27
Q

What are the results of learning effects

A

Labour productivity increases over time and unit costs decrease as employees learn the more efficient way to perform a task

28
Q

What is the experience curve

A

Refers to the systematic lowering of the cost structure and consequent unit cost reductions that have been observed to occur over the life of a product

29
Q

What are the clear implications of the experience curve

A

Increasing a company’s product volume and market share will lower its cost structure relative to its rivals

30
Q

Why are flexible product technology designed?

A
  1. Reduces set up times for complex equipment
  2. Increase the use of individual machines through better scheduling
  3. Improve quality control at all stages of manufacturing process
31
Q

What can mass customization achieve

A

Low cost and differentiation through product customization

32
Q

What is marketing strategy

A

Position that a company takes with their market segmentation, pricing, promotion, advertising, product design and distribution

33
Q

What are churn rates

A

Percentage of a company’s customers who defect every year to competitiors

34
Q

What are defection rates

A

Determined by customer loyalty which turn into a function of the ability of a company to satisfy customers

35
Q

What are one time fixed costs purpose

A

Acquire new customers

36
Q

What are examples of one-time fixed costs

A

Administrative, advertising and promotion

37
Q

Why is it important for a company to retain a customer

A

Leads to the greater volume of customer generated unit sales that can be set against fixed costs

38
Q

What are materials management

A

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

39
Q

What can companies achieve to adopt a just in time inventory system

A

Major cost savings from increasing inventory turnover to reduce inventory holding costs and the company’s need for working capital

40
Q

How can R&D lower the cost structure

A
  1. Boost efficiency by designing products that are easy to manufacture and decrease the required assembly time
  2. Pioneer process innovations to achieve a lower cost structure and improve efficiency which is a major source of competitive advantage
41
Q

What is employee productivity

A

Key determinant of a company’s efficiency, cost structure and profitability

42
Q

How can HR increase employee productivity

A
  1. Hiring strategy
  2. Employee training and development
  3. Self managing teams
  4. Pay for performanc
43
Q

What is the function of information systems

A

Move to the centre stage in the quest for operating efficiencies and lower cost structures

44
Q

What are examples of how information systems increase productivity

A
  1. Putting ordering and customer service functions online
  2. Using web based programs to automate customer and supplier interactions
  3. Replacing a physical store with an online virtual store
  4. Automating ordering and checkout process
45
Q

What is included in a company’s infrastructure

A

Structure, culture, style of strategic leadership and control system

46
Q

What is the leaderships task

A

Recognizes the need for all functions of a company to focus on improving efficiency

47
Q

What are fixed costs

A

Costs that must be incurred to produce a product regardless of the level of output

48
Q

What are diseconomies of scale

A

Where unit cost increases associated with a large scale of output

49
Q

What are flexible production technology

A

A range of technologies designed to reduce set up times for complex equipment, increase use of machinery through better scheduling and improve quality control at all stages of manufacturing processes

50
Q
A

Bus 478 (12 decks)

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