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Question 67 - CSCP discussion

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A company manufactures special products for select customers. When demand for these products drops, the manufacturer can switch the production line to a commodity-type product that can be sold on the open market at reduced terms to generate cash. The company is executing a corporate strategy that is based on:

A.
customer focus and alignment.
Answers
A.
customer focus and alignment.
B.
forecast accuracy.
Answers
B.
forecast accuracy.
C.
multiple downstream channels.
Answers
C.
multiple downstream channels.
D.
multiple upstream supply chains.
Answers
D.
multiple upstream supply chains.
Suggested answer: C

Explanation:

The company's strategy of switching production lines based on demand indicates a flexible approach to market conditions. Here's the explanation:

Special Products for Select Customers: Initially, the company focuses on manufacturing niche products for specific customers, indicating a customer-focused approach.

Switching to Commodity Products: When demand drops, the company shifts to producing commodity products that can be sold on the open market. This ensures continuous production and cash flow.

Multiple Downstream Channels:

Specialized Products Channel: For select customers, tailored to specific needs.

Commodity Products Channel: Open market sales, providing a broader market reach and flexibility.

Strategic Flexibility: This strategy leverages multiple downstream channels to optimize resource utilization, manage risks, and ensure financial stability.

Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.

Hill, T. (2000). Manufacturing Strategy: Text and Cases. Palgrave Macmillan.

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asked 16/09/2024
Francisco Rocha de Oliveira Junior
28 questions
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