CHAPTER 2: IMPLEMENTING STRATEGY: THE VALUE CHAIN, THE

Sol02_7e.pdf Student Solution Manuals 7e Chap 2.pdf Chap02_7e.pdf IRG_Chap02_7e.pdf Cost Management A Strategic Emphasis 7th Edition Blocher Solutions Manual Visit TestBankDeal.com to get complete for all chapters

Chapter 02 - Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

2-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

CHAPTER 2: IMPLEMENTING STRATEGY: THE VALUE CHAIN, THE

BALANCED SCORECARD, AND THE STRATEGY MAP

QUESTIONS

2-1 The two types of competitive strategy (per Michael Porter, as explained in chapter one) are cost leadership and differentiation. Cost leadership is the competitive strategy in which the firm succeeds by producing at the lowest cost in the industry. Differentiation is the competitive strategy in which a firm succeeds by developing and maintaining a unique value for the product, as perceived by consumers.

2-2 Many possible examples would be correct here. Examples offered in chapter one include Walmart, Texas Instruments, and HP (Hewlett-Packard).

2-3 Many possible examples would be correct here. Examples offered in chapter one include Tiffany, Bentley automobiles, Rolex, and Maytag.

2-4 The four strategic resources are used as follows. First the firm determines the critical success factors using SWOT analysis, and then uses execution to excel on these CSFs. The value chain is used to provide a more detailed understanding of the strategy and CSFs, by activity. Finally, the balanced scorecard is used to monitor and reward achievement of the CSFs and to provide a means for continual feedback to SWOT analysis, for desired changes in the overall strategy.

2-5 A strategy map is a framework for showing the relationships among the perspectives of the balanced scorecard. Typically, the scorecard has the following relationships; first, achievement in the learning and growth perspective contributes to successful performance in the internal processes perspective, which in turn leads to success at the customer perspective, and then finally the desired performance on the financial perspective.

2-6 SWOT analysis is a systematic procedure for identifying a firm's critical success factors: its internal strengths and weaknesses, and its external opportunities and threats. It is used in the first of the three steps of identifying a competitive strategy.

Chapter 02 - Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

2-2 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2-7 A management accountant is not focused on or limited to financial information only, as in the traditional view of cost and management accounting. In contrast, a strategic cost manager includes a consideration of the firm’s critical success factors, which might include such non-financial information as delivery speed and customer satisfaction.

2-8 Critical success factors are strategic financial and non-financial measures of success. Critical success factors are used to define and measure the means by which a firm achieves a competitive advantage. Strategic cost management involves the development, understanding, and use of critical success factors to manage business firms and other organizations. Examples of CSFs are shown in Exhibits 2.1 and 2.5.

2-9 Several potential critical success factors for an industrial chemical manufacturer

might include:

• cost and price, since most chemicals are commodities which compete

principally on price

• speed of delivery, since many applications for these chemicals require prompt

delivery

• quality of the chemicals, so that they meet the required specifications of the

customers

• location and cost of storage, to enhance customer service and reduce overall

costs

• modernization of production and processing facilities, to produce the highest

quality chemicals at the lowest prices

• research and development, to introduce new and improved products

2-10 Several potential critical success factors for a large savings and loan institution

might include:

• Spread between the cost of funds and the earnings on investments and loans
• Amount of total deposits, number of depositors, number of new offices,

number of loans

• Decrease in loan losses, number of bad loans, losses due to theft and fraud
• Training hours per employee and employee turnover
• Customer satisfaction as measured by phone survey or other means

Chapter 02 - Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

2-3 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.2-11 Several critical success factors for a small chain of retail jewelry stores might

include:

• Growth in sales, number of new customers, number of new products, number

of branch stores

• Operating costs, by category
• Customer satisfaction as measured by phone survey or mail survey
• Identification and introduction of new products
• Effective promotion and advertising using a variety of media
• Competitive service policies
• Identification of attractive store locations
• Effective control of inventory to prevent fraud and theft

2-12 Several potential critical success factors for a large retail discount store might

include:

• Growth in sales, number of new branch stores
• Operating costs, by category
• Customer satisfaction, as measured by phone survey or mail survey
• Identification and introduction of new products
• Effective promotion and advertising using a variety of media
• Competitive service policies
• Identification of attractive store locations
• Effective inventory management, both to reduce employee theft and also to

reduce waste, overstocking and excessive out-of-stock conditions

• Choice of merchandise mix, to attract customers

2-13 Several potential critical success factors for an auto-repair shop might include:

• reliability of service
• fair pricing
• warranty for service; and policies for satisfying customer complaints when they

occur

• inventory management to reduce loss, waste and to reduce the cost of

carrying inventory of parts

• proper location with sufficient parking and easy access
• effective marketing using the appropriate media