Value Innovation Is the Key to Creating Blue Oceans

question 1

Multiple Choice

Value innovation is the key to creating blue oceans. Please select all that are true.

• A) Value innovation occurs when organizations shift their focus from beating the competition to making the competition irrelevant by placing equal emphasis on both value and innovation.
• B) An organization needs to be able to appraise its competitive environment and to evaluate trends, which may start within the macro-environment.
• C) To ensure sustainable competitive advantage, an organization needs to upgrade its resources and capabilities based on what it believes will be the basis of future competition.
• D) Value innovation goes against Porter's assertion that an organization can pursue either differentiation or a low-cost strategy.

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Definitions:

Work in Process

Inventory that includes goods partially worked on but not yet completed; it is found between raw materials and finished goods in manufacturing.

Standard Cost

A predetermined cost for a product or service, based on expected material, labor, and overhead costs, used as a benchmark to control actual costs.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, reflecting changes in material prices.

Materials Quantity Variance

The gap between the actual and expected quantities of materials used in production, with each difference multiplied by the standard unit cost.