CHAPTER QUIZ QUESTIONS True/False 1. A characteristic of the overall cost leadership strategy is the incurring of start up losses to build market share. (T) 2. On-line networks between suppliers and their customers create a barrier to entry for competitors. (T) 3. When pursuing a differentiation strategy, a service firm should work to ensure that the service being offered is standardized. (F) 4. Service winners are the competitive dimensions used by customers to decide among qualified service providers. (T) 5. Quality is considered to be a structural element of the strategic service concept. (F) 6. Service industries have low entry barriers because economy-of-scale opportunities are limited. (F) 7. The use of micromarketing has the potential to create customer concerns about invasion of privacy. (T) 8. Implementing a low-cost strategy can sometimes revolutionize an industry. (T) 9. A cost leadership strategy often involves customizing a standard service. (F) 10. The competitive dimension of dependability is a likely candidate for becoming a service loser. (T) 11. Selling information and developing new services are examples of the role that information technology plays in generating revenue. (F) 12. Information technology can be used to promote customer loyalty. (T) 13. The IRS has identified frequent user programs as anti-competitive. (F) 14. American Airlines' early development of the SABRE reservation system became the foundation for its yield management innovation. (T) 15. Information databases are considered an asset, because they represent a source of revenue. (T) 16. Information is a substitute for inventory. (T) 17. Data Envelopment Analysis (DEA) when used repeatedly can facilitate the competitive strategy of cost leadership. (T) 18. Focus is a competitive strategy that creates a service perceived as being unique. (F) 19. Service encounter, quality, information, and capacity planning are all managerial elements of a strategic service concept. (F) 20. Ordering from L.L. Bean by telephone is an example of a service firm maximizing opportunities for economies of scale. (T) 21. A firm facing serious competition for the first time is in the journeyman stage of a service firm's competitiveness. (T) 22. World-class service operations strive to replace workers with enhanced automation. (F)
23. Service firms classified as "available for service" view quality improvement efforts with disdain. (T) 24. World-class service delivery firms are fortunate to have senior management with a vision of what creates value for a customer and also an understanding of the role that operations play in service delivery. (F) 25. For a firm achieving "journeyman" competitive status, the back-office function is considered an activity that plays an important role in service delivery. (F) 26. In a world-class service firm, the front-line management controls the process. (F)
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