Chapter 2: Implementing strategy

Question 1

What is the value chain analysis?

Answer 1

strategic analysis tool used to identify where value to customers can be increased or costs reduced in order to better understand the firm’s linkages with suppliers, customers and other firms in the industry.

Question 2

What are the three main phases of the value-chain analysis?

Answer 2

• Upstream: Product development and firm’s linkages with suppliers
• Operations: manufacturing operations
• Downstream: linkages with customers

Question 3

What are the two steps in the value-chain analysis?

Answer 3

1. Identify value-chain activities
2. Develop competitive advantage by reducing cost or adding value

Question 4

What are value activities?

Answer 4

firms in an industry perform activities to design, manufacture, and provide customer service

Question 5

What are the three important considerations of developing competitive advantages in the value chain analysis?

Answer 5

• Identify competitive advantage (cost leadership or differentiation)
• Identify opportunities for added value
• Identify opportunities for reduced cost

Question 6

What is the balanced scorecard?

Answer 6

framework that enables firms to employ strategy-centered performance measurement systems that focuses managers’ attention on critical success factors and rewards achievement.

Question 7

What are the four components of the BSC?

Answer 7

1. Financial perspective
2. Customer perspective
3. Internal process perspective
4. Learning and growth

Question 8

What are the 5 key benefits of the BSC?

Answer 8

1. Tracks progress toward achievement of strategic goals
2. Helps strategy implementation by focusing on strategically relevant CSF’s and rewards achievement
3. Can be used to achieve organizational change in strategy.
4. Fair and objective basis for firms to use in determining each manager’s compensation and advancement
5. Coordinates efforts to achieve CSF’s.

Question 9

What is a strategy map?

Answer 9

Strategy map is a graphical representation of how the firm will achieve its strategy from the four perspectives in the BSC. Starts at the bottom with learning and growth, followed by internal processes, customer, and financial perspectives.