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1 19 Identify which statement(s) from the scenario best imply(ies) that CAT is adopting a cost-based strategy. CAT offers a wide range of products and services. (Statement is from lines 2-3 of the scenario). O CAT launched a $1.85 billion program to modernize its 17 factories even though the return on investment was not guaranteed. (Statement is adapted from lines 6-7 of the scenario). The biggest savings comes from integrated materials-handling systems that have cut inventories of tens of thousands of components by nearly 40%. (Statement is from lines 17-18 of the scenario). Although the goal was to increase product quality, plant flexibility and reduce production-cycle time, customer satisfaction was the ultimate reason for the modernization program. (Statement is from lines 7-9). Within the earth-moving vehicle/equipment industry, and based on different possible perspectives, assume that CAT is competing on a broad scope. Based on lines 7-9 of the scenario, and the comment made by Bruce Schuver (the Operations Manager of the Aurora plant) regarding the reason for the modernization program: what generic business strategy is CAT adopting? Note: Michael Porter's terminology is used below to list the different generic business strategy choices. Differentiation Leadership Cost Leadership Cost Focus Differentiation Focus 6 1$ Review line numbers 24-26 (i.e., These computer systems help OM managers... Peoria, Illinois) in the scenario. Line numbers 24-26 indicate that these two value chain activities/departments in CAT are involved in an internal value chain linkage: Operations and outbound logistics Operations and inbound logistics Operations and sales O Procurement and finance. Identify which statement(s) from the scenario best imply(ies) that CAT is adopting a differentiation-based strategy. Note: Differentiation-based strategy can come in different flavors including process differentiation, product differentiation and service differentiation. CAT offers a wide range of products and services (statement is from lines 2-3 of the scenario). Although the goal was to increase product quality, plant flexibility and reduce production-cycle time, customer satisfaction was the ultimate reason for the modernization program. (Statement is from lines 7-9). Originally, the Aurora plant built several different vehicle models on just two assembly lines, requiring frequent, time-consuming setup changes. The redesigned factory runs eight shorter, more specialized lines. (Statement is from lines 15-17 of the scenario). All of the above can imply that CAT is adopting a differentiation-based strategy. 3 19 Based on a comment made by the Operations Director at the Arora plant, what would be the main reason for the technology-based modernization of the manufacturing plants? Cost savings Customer satisfaction Dropping corporate inventories Re-engineer and improve the production process 7 1s Refer to the successive lines in the scenario that include these words. "Their input - often a single keystroke in ..., transmit orders to suppliers." That is, refer to lines 21 to 24 in the second paragraph of the scenario. This part of the scenario indicates that these two are involved in an external value chain linkage. Operations and CAT's customers. Operations and CAT's suppliers. Sales and CAT's customers. Outbound logistics and CAT's suppliers. 8 15 Based on lines 21 through 24 in the second paragraph of the scenario, we can definitely conclude that the modernization program completely eliminated the bargaining power of CAT's suppliers. True False 9 14 The last four lines of the scenario may imply that the modernization program could shift (at least temporarily) the bargaining power of customers and the rivalry among existing competitors (e.g., Komatsu) in Caterpillar's favor. True False 10 1 The value derived in a value network configuration is directly related to Moore's law. True False 4 15 Note: In this question, we are not comparing CAT with an organization like Target, because Target is not much into the earth-moving equipment/vehicles' industry. We would consider a comparison between CAT and companies such as Deere & Company, Hitachi, and Komatsu to be a good comparison as these firms can be viewed as direct competitors within the earth-moving equipment/vehicles' industry. Recall that in this course, we consider different (multiple) perspectives such as geographic scope, range of products/services, and target market before deciding whether the scope of competition is broad or narrow. The answer choices for this question are taken/adapted from the scenario. Question: Identify the answer choice that best supports the claim that CAT is adopting a broad scope of competition within the earth moving vehiclesindustry. a. CAT is considered to be a global giant with several customers, factories, and competitors distributed all over the world. (See lines 1-2 of the scenario). O b. CAT offers a wide range of products and services (See lines 2-3 of the scenario). c. Statements a, and b both can imply that CAT is competing on a broad scope within the earth-moving equipment/vehicle' industry. 1 19 Identify which statement(s) from the scenario best imply(ies) that CAT is adopting a cost-based strategy. CAT offers a wide range of products and services. (Statement is from lines 2-3 of the scenario). O CAT launched a $1.85 billion program to modernize its 17 factories even though the return on investment was not guaranteed. (Statement is adapted from lines 6-7 of the scenario). The biggest savings comes from integrated materials-handling systems that have cut inventories of tens of thousands of components by nearly 40%. (Statement is from lines 17-18 of the scenario). Although the goal was to increase product quality, plant flexibility and reduce production-cycle time, customer satisfaction was the ultimate reason for the modernization program. (Statement is from lines 7-9). Within the earth-moving vehicle/equipment industry, and based on different possible perspectives, assume that CAT is competing on a broad scope. Based on lines 7-9 of the scenario, and the comment made by Bruce Schuver (the Operations Manager of the Aurora plant) regarding the reason for the modernization program: what generic business strategy is CAT adopting? Note: Michael Porter's terminology is used below to list the different generic business strategy choices. Differentiation Leadership Cost Leadership Cost Focus Differentiation Focus 6 1$ Review line numbers 24-26 (i.e., These computer systems help OM managers... Peoria, Illinois) in the scenario. Line numbers 24-26 indicate that these two value chain activities/departments in CAT are involved in an internal value chain linkage: Operations and outbound logistics Operations and inbound logistics Operations and sales O Procurement and finance. Identify which statement(s) from the scenario best imply(ies) that CAT is adopting a differentiation-based strategy. Note: Differentiation-based strategy can come in different flavors including process differentiation, product differentiation and service differentiation. CAT offers a wide range of products and services (statement is from lines 2-3 of the scenario). Although the goal was to increase product quality, plant flexibility and reduce production-cycle time, customer satisfaction was the ultimate reason for the modernization program. (Statement is from lines 7-9). Originally, the Aurora plant built several different vehicle models on just two assembly lines, requiring frequent, time-consuming setup changes. The redesigned factory runs eight shorter, more specialized lines. (Statement is from lines 15-17 of the scenario). All of the above can imply that CAT is adopting a differentiation-based strategy. 3 19 Based on a comment made by the Operations Director at the Arora plant, what would be the main reason for the technology-based modernization of the manufacturing plants? Cost savings Customer satisfaction Dropping corporate inventories Re-engineer and improve the production process 7 1s Refer to the successive lines in the scenario that include these words. "Their input - often a single keystroke in ..., transmit orders to suppliers." That is, refer to lines 21 to 24 in the second paragraph of the scenario. This part of the scenario indicates that these two are involved in an external value chain linkage. Operations and CAT's customers. Operations and CAT's suppliers. Sales and CAT's customers. Outbound logistics and CAT's suppliers. 8 15 Based on lines 21 through 24 in the second paragraph of the scenario, we can definitely conclude that the modernization program completely eliminated the bargaining power of CAT's suppliers. True False 9 14 The last four lines of the scenario may imply that the modernization program could shift (at least temporarily) the bargaining power of customers and the rivalry among existing competitors (e.g., Komatsu) in Caterpillar's favor. True False 10 1 The value derived in a value network configuration is directly related to Moore's law. True False 4 15 Note: In this question, we are not comparing CAT with an organization like Target, because Target is not much into the earth-moving equipment/vehicles' industry. We would consider a comparison between CAT and companies such as Deere & Company, Hitachi, and Komatsu to be a good comparison as these firms can be viewed as direct competitors within the earth-moving equipment/vehicles' industry. Recall that in this course, we consider different (multiple) perspectives such as geographic scope, range of products/services, and target market before deciding whether the scope of competition is broad or narrow. The answer choices for this question are taken/adapted from the scenario. Question: Identify the answer choice that best supports the claim that CAT is adopting a broad scope of competition within the earth moving vehiclesindustry. a. CAT is considered to be a global giant with several customers, factories, and competitors distributed all over the world. (See lines 1-2 of the scenario). O b. CAT offers a wide range of products and services (See lines 2-3 of the scenario). c. Statements a, and b both can imply that CAT is competing on a broad scope within the earth-moving equipment/vehicle' industry