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Question
Keurig, a coffee machine manufacturer, sells high-quality espresso machines at a very low price but provides low-cost refills of varietal coffee pods at a relatively higher price than rivals. Explain this business model.
Answer
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Related questions
Q:
Management's most powerful tool for winning employee commitment to good strategy execution is
A) the establishment of strategy-supportive policies and procedures.
B) empowering employees and encouraging them to adopt best practices.
C) setting stretch objectives.
D) a structure of rewards and incentives tied tightly to the achievement of the organization's strategic priorities.
E) aggressive use of TQM and Six Sigma quality control programs.
Q:
There is evidence that Six Sigma can
A) take longer than TQM to demonstrate significant results.
B) stifle innovation and creativity in organizations.
C) help managers run a tight ship and preserve strong, centralized control over internal activities.
D) provide ample justification for becoming an ambidextrous organization.
E) foster decentralized decision making and employee empowerment.
Q:
Which organization uses business process reengineering to attain operational excellence?
A) AT&T works toward creating a total quality culture by continuously reviewing the performance of every value chain activity.
B) Acer Phones uses advanced statistical methods to remove the causes of defects at its manufacturing units.
C) Ericsson introduces continuous-improvement business philosophy at its customer care centers.
D) Cellkon pulls the pieces of an activity out of different departments to create a cross-functional work group.
E) Honeywell strives to incrementally reduce defects through an ongoing assessment process.
Q:
Although it is relatively easy for rivals to implement process management tools, it is much more difficult and time-consuming for them to
A) instill a deeply ingrained culture of operating excellence.
B) keep employees well-informed about the strides being made with continuous improvement.
C) unify the managerial efforts behind improving operating practices as a commendable goal.
D) combine the pursuit of financial objectives with the pursuit of its strategic objectives.
E) understand the barriers to installing new operating activities.
Q:
The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that
A) reengineering is a tool for installing process organization, whereas TQM/Six Sigma concern defect-free production methods and delivering world-class customer service.
B) reengineering helps create core competencies, whereas TQM/Six Sigma are tools for making a core competence stronger and more efficient.
C) reengineering is a tool for achieving one-time quantum improvement, whereas TQM and Six Sigma programs aim at ongoing incremental improvements.
D) business process reengineering requires benchmarking, whereas TQM and Six Sigma do not.
E) reengineering represents an effort to totally revamp a firm's value chain, whereas TQM looks at incrementally improving the performance of two or three targeted value chain activities and Six Sigma is primarily for reducing manufacturing defects.
Q:
The statistical thinking underlying Six Sigma is based on which of the following three principles?
A) All activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible.
B) All work is a process, all processes have variability, and all processes create data that explains variability.
C) All work activities can be done accurately most of the time, empowered employees are necessary for effective control, and good statistical data is an empowered employee's best control tool.
D) All work is a statistically controllable process, 100 percent control is possible, and every well-controlled process is defect-free.
E) Most business processes are subject to control, Six Sigma can totally remove variability in how processes are performed, and most defects can be eliminated.
Q:
Total quality management (TQM) emphasizes all of the following EXCEPT
A) a 100 percent accuracy in performing tasks.
B) the continuous improvement in all phases of operations.
C) the adoption of industry standard operating practices.
D) benchmarking and total customer satisfaction.
E) the empowerment of employees and team-based work design.
Q:
Business process reengineering
A) involves radically redesigning and streamlining the workflow (typically enabled by cutting-edge use of online technology and information systems), with the goal of achieving quantum gains in performance of the activity.
B) is not a useful tool for streamlining a company's work effort and moving it closer to operational excellence.
C) is the major tool that ambidextrous organizations deploy to drive continuous improvement efforts.
D) is typically cheaper and easier than using Six Sigma techniques to achieve the same cost savings.
E) is a company's best justification for eliminating all nonmonetary rewards and incentives for its employees.
Q:
A "best practice" refers to a
A) policy or procedure that is unusually effective.
B) method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence.
C) strategy-critical activity that results in sustainable competitive advantage.
D) value chain activity that is a company's distinctive competence.
E) particular value chain activity that management has given top priority to performing in world-class fashion.
Q:
Imagine you are a consultant to a local donut shop chain. You have been asked to design a superior strategy execution effort for the owners of the company. What process management tool would you most likely NOT provide to the owners?
A) best practices methods to drive continuous improvement in how internal operations are and should be conducted at the donut chain.
B) benchmarking of the donut chain's operating activities and business processes against "best-in-industry" and "best-in-world" performers.
C) "best-in-company" operating activities and processes to standardize how the different locations of the donut chain perform the same functions.
D) operating practices that generate economies of scale and scope without a reconfiguration of the donut chain's current value chain activities.
E) performance yardsticks for judging effectiveness and efficiency for particular value chain activities and business processes that are deemed strategically critical for the donut chain.
Q:
What is a good example of how NOT to facilitate strategy execution?
A) Kia's service centers follow similar routines when receiving vehicles for servicing.
B) Ford encourages its staff to refrain from engaging in practices out of sync with the company's mission.
C) Honda's personnel follow a 227 page manual to ensure that its showrooms have similar operating practices across regions.
D) Chevrolet's electric vehicle service center personnel receive the same specialized training and replicate the caliber of customer service across locations.
E) Tesla resists standardization of the way activities are performed at its service centers because its personnel have primarily been poached from BMW, Chevrolet, and VW's electric vehicle divisions.
Q:
The most important symbolic actions are those that top executives take to
A) lead by example.
B) lead by influence.
C) follow by example.
D) follow the majority.
E) lead to the contrary.
Q:
Changing a problem culture to create better alignment with strategy generally does NOT involve
A) replacing old-culture managers with new-breed managers.
B) designing compensation incentives that boost the pay of teams and individuals who display the desired cultural behaviors and hit change-resisters in the pocketbook.
C) altering the company's financial objectives.
D) using company gatherings and ceremonial occasions to praise individuals and groups that display the desired new cultural traits and behaviors.
E) both symbolic and substantive actions by executives to implant new cultural behaviors.
Q:
Managers can alter a problem culture if they
A) identify aspects of the present culture that pose problems.
B) revise policies and procedures in ways that will help drive cultural change and replace senior executives who are resisting and obstructing needed organizational and cultural changes.
C) empower employees to adopt whatever new work practices they believe will be an improvement.
D) make a concerted effort to turn the company's core competencies into distinctive competencies.
E) shift from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change.
Q:
The single most visible factor that distinguishes successful culture-change efforts from failed attempts is
A) forceful management actions to empower employees to adopt new operating practices.
B) competent leadership at the top.
C) de-layering the management hierarchy.
D) developing a new value statement that inspires company personnel to put forth their best efforts to achieve performance targets.
E) convincing employees that top management is genuinely committed to high ethical standards and the exercise of corporate social responsibility.
Q:
Changing a problem culture
A) is one of the toughest managerial tasks because of the heavy anchor of ingrained behaviors and ways of doing things.
B) is best done by instituting an aggressive program to train employees in the ways and beliefs of the new culture to be implanted.
C) is best done by selecting a team of key employees to lead the culture change effort.
D) requires writing a new statement of core values, having a series of lengthy meetings with employees to explain the new culture and the reasons why cultural change is needed, and then having both employees and shareholders vote to ratify and adopt the new culture.
E) can be done quickly only if managers tie incentive compensation to exhibiting the desired new cultural behaviors and if managers visibly praise people who exhibit the desired new cultural traits.
Q:
What defines an insular, inwardly focused culture?
A) The firm never underestimates rivals because of their proven track record in defending challenges.
B) The firm believes they have all the answers because of their past great market success and is thus overconfident.
C) The firm's unflinching belief in the company's superiority breeds a champion's attitude and thus they thrive on doing better by adapting to fresh thinking from outside the company.
D) The firm values their customers' opinions and fully understands their needs and expectations.
E) The firm has a commitment to hiring young people who can offer fresh thinking and new perspectives.
Q:
When are multiple subcultures MOST problematic?
A) when they are compatible with the overarching corporate culture and are supportive of strategy-execution
B) when they don't clash and coordinating efforts to craft and execute strategy within each subculture is relatively easy
C) when they foster teamwork and support a collaborative approach to strategy execution
D) when they embrace conflicting business philosophies that are inconsistent with superior strategy execution
E) when they guide management in coming up with consistent approaches to executing company strategies
Q:
A useful guideline in designing strategy-facilitating policies and operating procedures is
A) to prescribe enough policies to give organizational members clear direction in implementing strategy and to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.
B) that strictly enforced policies work better than loosely enforced policies.
C) that more policies/procedures work better than fewer policies/procedures, and that strict enforcement always beats lax enforcement.
D) to let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture.
E) to prescribe enough policies and procedures that little is left to chance in performing value chain activities, and employees should have no leeway to do things in a manner that deviates from the company's best-practices standard.
Q:
A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because
A) changes in strategy often require resource reallocation, and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently.
B) accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently.
C) tight budget control is management's most powerful tool for first-rate strategy execution.
D) lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
E) lean, strictly enforced budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner.
Q:
Identify types of support systems that a company can install to support the execution of its strategy. How important are these systems to the strategy implementation process?
Q:
How has Wegmans created a strategy-supportive reward structure?
Q:
Why is it unwise to take off the pressure for good performance or play down the adverse consequences of shortfalls in performance as part of a company's motivational and reward scheme for promoting competent strategy execution?
Q:
Provide three examples of nonmonetary motivation and rewards practices that have the capability to foster good strategy execution and explain how they act to produce such a result.
Q:
Natalie and Vinnie own the Russian River Brewing Company, a craft brewer and taproom in Northern California. What actions could the partners take to realize full value from TQM or Six Sigma initiatives and promote a culture of operating excellence?
Q:
When a company's culture is out of sync with what is needed for strategic success and good strategy execution
A) the strategy has to be changed as rapidly as possible to regain harmony with cultural norms.
B) company personnel need to cling to familiar practices, be wary of change, and blame top management for any shortfalls in performance.
C) management needs to go on the offensive to reinterpret the culture and explain to company personnel why there really is good overall cultural fit with the strategy.
D) any unhealthy or dysfunctional cultural traits must be changed as fast as possible and management needs to be aggressively striving to ingrain new behaviors and work practices that will enable first-rate strategy execution.
E) management must sanction any company personnel who refuse to participate in an all-out effort to create a different portfolio of competencies and capabilities that will permit the strategy to be changed in ways that will fit the culture.
Q:
In direct contrast to strong-culture companies, what is NOT likely to be typical characteristic of a weak company's culture?
A) a lack of values and principles that are consistently preached or widely shared
B) a tendency among employees to view their jobs as just a way of making a living
C) co-worker peer pressure to do things in a particular way
D) few widely revered traditions and few culture-induced norms
E) no strong employee allegiance to what the company stands for or to operating the business in well-defined ways
Q:
Which of the following statements about a company's culture is NOT true?
A) The more new employees a company is hiring, the more important it becomes to screen job applicants every bit as much for how well their values, beliefs, and personalities match up with the culture as for their technical skills and experience.
B) The longer people stay at an organization, the more that they come to embrace and mirror the corporate culturetheir values and beliefs tend to be molded by mentors, fellow workers, company training programs, and the reward structure.
C) A company's culture, once established, tends to remain stable and entrenched over time.
D) Typically, key elements of the culture originate with a founder or certain strong leaders who articulated them as a set of business principles, company policies, operating approaches, and ways of dealing with employees, customers, vendors, shareholders, and local communities where the company has operations.
E) Company cultures can be perpetuated by the telling and retelling of company legends, by regular ceremonies honoring members who display desired cultural behaviors, and by visibly rewarding those who display cultural norms and penalizing those who don't.
Q:
Epic Systems' stated values and ethical standards impact its corporate culture in all of the following ways EXCEPT
A) communicating the company's good intentions.
B) validating the integrity and above-board nature of the company's business principles and operating methods.
C) steering company personnel toward both doing things right and doing the right thing.
D) establishing a corporate conscience.
E) identifying how best to adapt to changing market conditions.
Q:
The retelling of legendary stories does a lot for establishing a company's core values, but it should NOT
A) place pressure on company personnel to display core values and to do their part in keeping the companies traditions alive.
B) illustrate the kind of behavior the company reveres.
C) inspire company personnel to perform similarly and reinforce the depth of commitment that people have displayed.
D) reflect an aspect of company culture no longer current.
E) steer company personnel toward both doing things right and doing the right thing.