Cost Management A Strategic Emphasis 7th Edition Blocher Test Bank

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2-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 02

Implementing Strategy: The Value Chain, the Balanced Scorecard and

the Strategy Map

Multiple Choice Questions

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

• At the firm as a potential customer.

• Inside the firm at its specific resources.

• At the firm's competition.

• At the firm's product.

• Outside the firm from a consultant's perspective.

2. In SWOT analysis, opportunities and threats are identified by:

• Consultation with middle management.

• Talking with the rank and file workers.

• Looking outside the firm.

• Brainstorming techniques.

• Reviewing our corporate strategy.

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

• Which of the following does not represent a possible opportunity for a manufacturing firm as a

part of SWOT analysis?

• Demographic trends.

• Technological advances in the industry.

• A patent developed by another firm for manufacturing a product.

• Changes in regulation of the industry.

• Changes in the economic environment facing all industries.

4. The balanced scorecard:

• Is not comprehensive, since it doesn't include all the critical success factors which contribute to

competitive success.

• Helps focus managers' attention to bottom line profits.

• Is forward looking, stressing nonfinancial measures that can lead to benefits in the future.

• Fails to reflect environmental and social effects of the firm's operations.

• Is heavily weighted toward the financial critical success factors.

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

employees:

• Can see how it is put together.

• Appreciate all the effort that goes into its preparation.

• Respect management for including them in its formulation.

• Can see how their actions contribute to the success of the firm.

• Do not feel left out.

2-3 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

6. The Euro is:

• A combination of European nations that cooperate on economic and trade matters.

• A version of Disney World located near Paris.

• A currency used in many European countries.

• A currency used in all European countries.

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

can:

• Justify increases in the price of the product or service.

• Increase value to the customer or reduce cost in some way.

• Outsource production to other producers.

• Improve efficiency.

• 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:

• Placing greater emphasis on the value chain.

• Moving to an emphasis on upstream activities in the value chain.

• Moving to an emphasis on downstream activities in the value chain.

• Identifying most profitable customers.

• Moving to an emphasis on both the upstream and downstream activities in the value chain.

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

financial measure of success?

• Cash flow.

• Growth in industry productivity.

• Sales growth.

• Earnings growth.

• Reduction in the cost of inventory.