8) Standardization is an appropriate strategy in which stage of the product life cycle?
A) introduction
B) growth
C) maturity
D) decline
E) retirement
9) Cost minimization is an appropriate strategy in which stage of the product life cycle?
A) introduction
B) growth
C) adolescence
D) decline
E) retirement
10) Which of the following OM strategy/issues should a firm with a product in the maturity stage of its
life cycle be LEAST concerned with at the present time?
A) increase capacity
B) long production runs
C) standardization
D) cost cutting
E) fewer rapid product changes
11) Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM
Strategy/Issues should the makers of 3D printers be least concerned with at the current time?
A) forecasting
B) cost cutting
C) increasing capacity
D) product and process reliability
E) enhancing distribution
12) Which of the following has progressed the FURTHEST along its product life cycle?
A) drive-through restaurants
B) Boeing 787
C) iPods
D) 3-D game players
E) Xbox 360
13) Which of the following has made the LEAST progress along its product life cycle?
A) drive-through restaurants
B) Boeing 787
C) iPods
D) 3-D game players
E) Xbox 360
14) ________ is the stage in product life cycle at which it is a poor time to change quality.
Section 5 Strategy Development and Implementation
1) Key success factors and core competencies are synonyms.
2) SWOT analysis is a method of determining external strengths and weaknesses and internal
opportunities and threats.
3) Key success factors are those activities that are key to achieving competitive advantage.
4) Which of the following statements is most correct?
A) KSFs are often necessary, but not sufficient for competitive advantage.
B) KSFs are often sufficient, but not necessary for competitive advantage.
C) KSFs are neither necessary nor sufficient for competitive advantage.
D) KSFs are both necessary and sufficient for competitive advantage.
E) None of the above statements is correct.
5) An SWOT analysis determines:
A) internal strengths and weaknesses and internal opportunities and threats.
B) internal strengths and weaknesses and external opportunities and threats.
C) external strengths and weaknesses and internal opportunities and threats.
D) external strengths and weaknesses and external opportunities and threats.
E) internal strengths and opportunities and external weaknesses and threats.
6) Define core competencies.
7) What is SWOT analysis? List its four elements and describe its purpose.
8) Starbucks is one of the best known coffeehouse chains in the world. Each store sells a variety of
innovative products to complement the array of coffee choices available. However, 75% of current stores
are located in the United States and the expensive nature of the coffee leaves Starbucks vulnerable to
changes in consumer spending behavior (such as recessions). Recently Starbucks has begun initiatives to
sell its specialty coffee beans for home use, presenting a chance for a large increase in revenue and
diversification. However, Starbucks faces fierce competition seeking a piece of its lucrative market share
and the threat of consumer behavior changes, given its reputation rides on a singular product. Perform an
SWOT analysis for Starbucks.
9) Perform an SWOT analysis of Boeing’s 787 Dreamliner using the information presented in the text.
Section 6 Strategic Planning, Core Competencies, and Outsourcing
1) Outsourcing is the practice of transferring a firm’s activities that have traditionally been internal to
external suppliers.
2) Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.
3) Core competencies are good candidates for outsourcing.
4) The theory of competitive advantage implies that you should allow another firm to perform work
activities for your company if that company can do it more productively than you can.
5) The theory of comparative advantage implies that you should allow another firm to perform work
activities for your company if that company can do it more productively than you can.
6) The term renewal has been created to describe the return of business activity to the originating country.
7) What is the practice of transferring a firm’s activities that have traditionally been internal to external
suppliers?
A) nearshoring
B) farshoring
C) offshoring
D) outsourcing
E) backsourcing
8) Outsourcing is simply an extension of the long-standing practice of:
A) subcontracting.
B) importing.
C) exporting.
D) postponement.
E) e-procurement.
9) Outsourcing manufacturing is also known as:
A) license manufacturing.
B) sublease manufacturing.
C) concurrent manufacturing.
D) hollow manufacturing.
E) contract manufacturing.
10) What theory implies that you should allow another firm to perform work activities for your company
if that company can do it more productively than you can?
A) theory of competitive advantage
B) theory of core competencies
C) theory of comparative advantage
D) theory of outsourcing
E) theory of offshoring
11) Which of the following statements is most accurate?
A) Nearly all outsourcing relationships do not last beyond two years.
B) Nearly all U.S. firms that outsourced processes to India have backsourced them.
C) Approximately half of all outsourcing agreements fail.
D) Outsourcing is a relatively risk-free activity.
E) More than 90% of outsourcing agreements succeed.
12) Which of the following is not an advantage of outsourcing?
A) cost savings
B) gaining outside expertise
C) improving operations and service
D) outsourcing core competencies
E) accessing outside technology
13) Advantages of outsourcing do NOT include:
A) cost savings.
B) gaining outside expertise.
C) maintaining a focus on core competencies.
D) accessing outside technology.
E) potential creation of future competition.
14) An operations manager is performing a factor-rating analysis to help her choose an outsourcing
provider. She is focusing on three factors: A, B, and C, with weights of .50, .20, and .30, respectively. She
has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling
Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor–rating
score for Ling Services?
A) 98.0
B) 32.7
C) 21.8
D) 29.2
E) 30.8
15) An operations manager is performing a factor-rating analysis to help him choose an outsourcing
provider. He is focusing on two factors: A and B, using a weight of 75% for factor A and 25% for factor B.
He has scored five different potential providers on both factors, using a scale of 1-5, with 1 representing
the BEST score. Based on the scores provided in the table below, which provider should be chosen?
Provider
Factor A
Factor B
Alpha
1
5
Beta
3
3
Gamma
4
1
Phi
2
1
Omega
3
5
A) Alpha
B) Beta
C) Gamma
D) Phi
E) Omega
16) ________ is the practice of transferring a firm’s activities that have traditionally been internal to
external suppliers.
17) Outsourcing manufacturing is also known as ________.
18) Outsourcing is an extension of the long-standing practice of ________ production activities.
19) The theory of ________ implies that you should allow another firm to perform work activities for your
company if that company can do it more productively than you can.
20) Identify three factors fueling the continuing growth of outsourcing.
21) Identify five main advantages of outsourcing.
22) Identify five main disadvantages of outsourcing.
23) A company is choosing an outside firm to provide its payroll services. It has chosen four comparative
categories of interest: client reviews, financial condition, IT capabilities, and government stability. These
categories have been assigned weights of 30%, 10%, 20%, and 40%, respectively. Three potential
providers were scored on each of those factors (see table below) using a scale of 1-10, with a score of 1
meaning worst possible and 10 meaning best possible. Using the factor–rating method, which provider
should be chosen?
Provider A
Provider B
Provider C
Client reviews
2
6
10
Financial condition
8
4
2
IT capabilities
5
8
2
Government stability
3
1
2
24) A company is deciding between 2 foreign firms to provide its call center services. A factor-rating
method is used. Factors are rated on a scale of 1-10, with 10 being the best score.
A: If the factors are weighted equally (respective weights of .3333), which firm is preferred?
B: Suppose a consultant recommended that Factor 2 be twice as important as Factor 1, while Factor 3
should be four times as important as Factor 1. Which firm is best now using a weighted method? (Round
your weights to the nearest four decimal places.)
Firm
Factor 1
Factor 2
Factor 3
A
10
7
4
B
5
8
6
1) A multinational corporation is a firm with extensive international business involvement.
2) The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost
advantage.
3) Firms using the global strategy can be thought of as “world companies.”
4) Which of the international operations strategies involves high cost reductions and high local
responsiveness?
A) international strategy
B) global strategy
C) transnational strategy
D) multidomestic strategy
E) worldwide strategy
5) Which of the international operations strategies involves low cost reductions and low local
responsiveness?
A) international strategy
B) global strategy
C) transnational strategy
D) multidomestic strategy
E) worldwide strategy
6) Which of the international operations strategies uses import/export or licensing of existing products?
A) international strategy
B) global strategy
C) transnational strategy
D) multidomestic strategy
E) worldwide strategy
7) Which of the international operations strategies uses the existing domestic model globally?
A) international strategy
B) global strategy
C) transnational strategy
D) multidomestic strategy
E) worldwide strategy
8) The acronym MNC stands for
A) Mexican National Committee (for international trade)
B) Maquiladora Negates Competition
C) Maytag-Nestlé Corporation
D) Multinational Corporation
E) Maritime Navigation Company
9) Caterpillar and Texas Instruments are two firms that have benefited from the use of:
A) the multidomestic strategy option.
B) the international strategy option.
C) the transnational strategy option.
D) the maquiladora system in Europe.
E) the global strategy option.
10) A(n) ________ is a firm that has extensive involvement in international business, owning or
controlling facilities in more than one country.
11) The ________ strategy utilizes a standardized product across countries.
12) The ________ strategy uses exports and licenses to penetrate globally.
13) The ________ strategy uses subsidiaries, franchises, or joint ventures with substantial independence.
14) The ________ strategy describes a condition in which material, people, and ideas cross or transgress
national boundaries.
15) Identify and explain the four basic global operations strategies. Give an example of each strategy.