Deck 3: Productivity, innovation and Strategy

Question 1

The increasing reliance on the web for information has created a digital divide between those who have Internet access and those who do not.

Answer 1

True

Question 2

Porter's concept of a business chain is crucial for developing a competitive strategy.

Answer 2

False

Question 3

According to Porter's model,four competitive forces determine industry profitability.

Answer 3

False

Question 4

In a large city,the threat of new entrants for the sandwich shop business is probably high.

Question 5

Sustaining technologies are changes in technology that maintain the rate of improvement in customer value.

Question 6

One way of assessing the structure of the adventure travel industry is to apply Porter's Five Forces Model.

Question 7

Porter identified five fundamental competitive strategies.

Question 8

The productivity paradox suggests IT investments do not create business value.

Question 9

Threat of government regulation is one of the five forces in Porter's model.

Question 10

An organization responds to the structure of its industry by choosing a competitive strategy.

Question 11

Primary activities are activities where value is added directly to the product.

Question 12

Disruptive technologies introduce a very new package of attributes to the accepted mainstream products.

Question 13

As defined by Porter,a value chain is a network of value creating activities.

Question 14

A value chain is a network of activities that improve the effectiveness of a good or service.

Question 15

The bargaining power of customers is one of the competitive forces identified by Porter.

Question 16

Sales and service would be examples of supporting activities in Porter's value chain model.

Question 17

The bargaining power of customers is one of the competitive strategies identified by Porter.

Question 18

An organization's goals and objectives are determined by the structure of its value chain.

Question 19

Accounting functions like accounts receivables would be an example of a supporting activity in Porter's value chain model.

Question 20

Among its suppliers,Wal-Mart is famous for not having much bargaining power.

Question 21

Increasing efficiency means

A) generating better quality products with less resources.
B) maximizing the cost of production.
C) shorter production times.
D) accomplishing business processes with less input and/or higher speeds.
E) higher speed processes at the cost of more resources and lower quality.

Question 22

An information system that allows suppliers to view a company's inventory in real-time would provide a competitive advantage due to product differentiation.

Question 23

Which of the following is an example of a primary activity in a value chain?

A) A manager preparing a production schedule
B) A CFO preparing a budget
C) An accountant preparing an income statement
D) A computer technician backing up a file server
E) A worker spray painting a car

Question 24

The observed lack of productivity from IT investments is most likely the result of

A) measurement errors.
B) inflation.
C) declining interest rates.
D) the introduction of new technologies.
E) continued drops in hardware prices.

Question 25

Switching costs are those associated with network switches.

Question 26

The physically assembly of a notebook computer is considered to be

A) a support activity in a value chain.
B) a production activity in a value chain.
C) a primary activity in a value chain.
D) a secondary activity in a value chain.
E) a value adding activity in a value chain.

Question 27

Some competitive advantages are less sustainable than others.

Question 28

A primary activity in a value chain is best described as

A) an activity that uses only raw materials.
B) an activity that involves customer service and sales.
C) an activity that requires the use of information systems.
D) an activity which value is directly added to a product.
E) the first activity in which value is created.

Question 29

The difficulty in measuring productivity is largely due to

A) the lack of measuring tools.
B) the difficulty of measuring intangible benefits.
C) an increasingly service-based economy.
D) IT creating intangible benefits.
E) the intangible benefits of IT in an increasingly service-based economy.

Question 30

The systems chosen to support a particular competitive strategy may be evaluated according to the support they give that strategy.

Question 31

A supporting activity in a value chain is best described as

A) information technology related activities.
B) activities that do not require manual labor.
C) activities that support the primary activities in a value chain.
D) activities that add no value to a value chain.
E) maintenance related activities.

Question 32

In Porter's Five Forces Model the linkages depict how competitive forces are deployed in an organization.

Question 33

A call centre used for customer service would be an example of a support activity in the value chain.

Question 34

General Motors' OnStar system was developed so that car drivers could easily get help in emergency situations.This would be an example of an information system being used to differentiate a product.

Question 35

Which of the following is an example of a supporting activity in a value chain?

A) An accountant filing an income tax statement
B) Assembling a product
C) Product package design
D) A bottle of wine being shipped to a warehouse
E) Product safety tests

Question 36

"Doing things right" refers to

A) efficiency.
B) value creation.
C) effectiveness.
D) social responsibility.
E) sustainability.

Question 37

A value chain (is)

A) a group of activities that improve the effectiveness of a good or service.
B) describes how a product moves through a distribution channel.
C) a group of activities that improve the efficiency of a good or service.
D) describes total amount of money spent on making a product.
E) describes the transactions that occur between the vendor and the consumer.

Question 38

IT investments can generate value by

A) limiting the opportunities for creating competitive advantages.
B) decreasing productivity.
C) creating larger and larger service based economies.
D) limiting the ways corporations can compete.
E) creating more efficient and effective business processes that lead to lower prices.

Question 39

The Productivity Paradox refers to

A) increased spending on IT leading to decreased worker productivity.
B) the evidence that suggests IT is irrelevant to worker productivity.
C) increased IT investment leading to more sustainable competitive advantage.
D) the lack of evidence of an increase in worker productivity associated with the massive increase in IT spending.
E) falling computer prices due to increased processor speed.

Question 40

"Doing the right things" refers to

A) efficiency.
B) social responsibility.
C) improved quality.
D) effectiveness.
E) sustainability.

Question 41

High switching cost refers to

A) a service charge that discourages customers from switching service providers.
B) a strategy employed by companies to prevent customers from renegotiating service contracts.
C) an illegal tactic that prevents customers from leaving by charging a prohibitive service termination fee.
D) a strategy employed by companies to lock in customers by making it difficult or expensive to switch to another product.
E) a strategy used by telecom providers to retain customers.

Question 42

In "IT doesn't Matter",Nicholas Carr argues that

A) disruptive technologies tend to be commoditized over time and hence provides less strategic advantage.
B) companies are spending too much money on IT.
C) there are no productivity gains for any amount of IT investments.
D) the marginal benefits of an IT investment decreases over time.
E) technology adds no value to companies.

Question 43

Sustained competitive advantage requires

A) companies to find a distinctive way to compete.
B) the elimination of the dominant firm.
C) companies to seek patent protection for their products.
D) the creation of barriers of entry.
E) companies to use more than one competitive strategies.

Question 44

A company can create competitive advantage by

A) lowering switching costs.
B) refusing alliances.
C) staying with the "tried and true" processes that competitors use.
D) reducing barriers to entry.
E) adding technology to its business process.

Question 45

Disruptive technologies refer to

A) technological innovations that increase the value of existing products in an incremental way.
B) technological innovations that cause major disruptions in IT operations.
C) technological innovations that decrease the value of existing products.
D) technological innovations that repackage attributes of existing products in a totally new way.
E) technological innovations that set a new standard, like High Definition Television.

Question 46

Which of the following is the best example of the bargaining power of suppliers?

A) The customer's flexibility to switch suppliers at any time.
B) The ability of a dominant microprocessor manufacturer to set industry standards and charge premium prices.
C) The ability to negotiate better terms with a commodity producer after a competitive bidding process.
D) The ability of a customer to shop around for suppliers.
E) The inability for a customer to terminate a supply contract.

Question 47

Which of Porter's five forces best describes the decline of film based photography?

A) Threat of substitute products
B) Bargaining power of suppliers
C) Threat of new entry
D) Bargaining power of customers
E) Rivalry among existing firms

Question 48

Margin can be defined as

A) the difference between the total cost of raw materials and the list price of a product.
B) the difference of the price a customer is willing to pay and how much the company actually collects.
C) the difference of the price a customer is willing to pay and the price a seller is willing to sell at.
D) the difference between the selling price and the list price.
E) the difference of the price a customer is willing to pay and the cost of moving the good or service through its value chain.

Question 49

Which of the following is a fundamental competitive strategy suggested by Porter?

A) Growing the diversity of the products and / or service offered
B) Providing the best customer service
C) Creating alliance partners
D) Developing innovative products
E) Differentiating its products

Question 50

Which of the following makes it difficult for a company to copy a rival's information systems?

A) The data is different in the two organizations.
B) It is difficult to duplicate business processes.
C) Technology may not be available for sale.
D) mastering the art of integrating technology and people.
E) Talent is hard to recruit.

Question 51

Which of the following can create a barrier to entry?

A) Small capital investment required
B) Patents
C) Minimal training needed
D) Can be done from home
E) Low labour costs

Question 52

How can competitive advantage through IT be sustained?

A) Competitive advantage through IT cannot be sustained.
B) By using as much proprietary technologies as possible.
C) By making all employees sign nondisclosure agreements.
D) By suing any competitor whom your firm suspect is copying its systems.
E) By integrating all value creation processes into the organization.

Question 53

Information systems can change industry structure by

A) using sustaining technologies.
B) using technologies that have become commodities.
C) using competitive strategies.
D) using the Internet.
E) using disruptive technologies.

Question 54

Which of the following is not a force in the Porter's five forces model?

A) Threat of substitute products
B) Bargaining power of suppliers
C) Bargaining power of customers
D) Threat of new entries
E) Threat of government regulations

Question 55

Which of the following best describes the introduction of a disruptive technology in Canada?

A) The introduction of high definition TV
B) The introduction of movies on DVDs
C) The introduction of satellite radio
D) The introduction of digital projection in theatres
E) The introduction of Automatic Teller Machines

Question 56

Which of the following best describes Bower and Christensen's idea of a sustaining technology?

A) A technology innovation that increases the rate of improvement in customer value.
B) A technology innovation that provides a very new package of attributes from the accepted mainstream products.
C) A technology innovation that ensures environmental sustainability.
D) A technology innovation that decreases the rate of improvement in customer value.
E) A technology innovation that maintains the rate of improvement in customer value.

Question 57

Which of the following can be best described as a disruptive technology?

A) Vulcanized rubber tires
B) Compact Discs
C) Digital music players
D) Liquid Crystal Displays
E) Portable computers

Question 58

A company can use products to create competitive advantage by

A) differentiating its products.
B) raising prices.
C) adding products to its product line.
D) increasing brand awareness.
E) lowering prices.

Question 59

Which of the following can be considered a sustaining technology?

A) An internal antenna for cell phones
B) A BlackBerry device
C) MP3 file format
D) A typewriter
E) A photocopier

Question 60

In the context of Porter's five forces model,customer's bargaining power refers to

A) a customer's ability to create barriers to entry.
B) a customer's ability to alter his/her value chain.
C) a customer's ability to integrate IT.
D) a customer's ability to negotiate better prices.
E) a customer's ability to create substitutes.

Question 61

According to Porter's model of the value chain,the use of IS can make _______________ more effective or efficient.

A) Primary activities
B) Complex calculations
C) supporting activities
D) importing and exporting
E) Linked departments

Question 62

Ideally,a competitive advantage should be

A) industry-wide.
B) short term.
C) reproducible.
D) shared with partners.
E) sustainable.

Question 63

Porter's five competitive forces include new vendors,suppliers,substitute vendors,customers and

A) finance.
B) rivalry of firms.
C) economic pressures.
D) efficiency of production.
E) marketing.

Question 64

Each value chain consists of one or more business ______________.

A) activities.
B) linkages
C) processes.
D) systems.
E) partners.

Question 65

Describe the ways in which companies gain a competitive advantage over other companies seeking the same customers.

Question 66

The network of activities that improve the effectiveness of a good or service is called

A) a value chain.
B) a supplier network.
C) competitive strategies.
D) a supply chain.
E) a value web.

Question 67

________ is an example of a primary activity in Porter's value chain model.

A) New IS development
B) Shipping and receiving
C) HR planning
D) Strategic planning
E) Accounting

Question 68

The threat of new entrants in an industry is high when

A) entry and exit costs are low.
B) entry costs are high.
C) distribution channels are few.
D) entry and exit costs are high.
E) few suppliers exist.

Question 69

If Goodyear Tires buys a rubber plantation,this is an example of _____________.

A) departmental integration
B) quality controls
C) backward integration
D) value chain management
E) reducing complexity

Question 70

Competitive ________ refers to a significant and sustainable benefit to a company over its competition.

A) commerce
B) strategy
C) planning
D) advantage
E) disintermediation

Question 71

Receiving and storing raw materials for production would be an example of a(n)________ in Porter's value chain model.

A) support activity
B) primary activity
C) linkage
D) integrated activity
E) complex activity

Question 72

________ would be an example of using an information system to gain competitive advantage.

A) Automating the general ledger system
B) Developing a web service to share information with a supply chain partner
C) Using PowerPoint for company presentations
D) Using instant messaging while at work
E) Printing internal reports in color

Question 73

________ is an example of a support activity in Porter's value chain model.

A) Goods production
B) Warranty service
C) Finished goods inventory management
D) Payroll management
E) Raw material acquisition

Question 74

What is meant by the "value chain"? How does it apply to information systems?

Question 75

Finding a vendor and negotiating a price for raw materials for production would be an example of a(n)________ in Porter's value chain model.

A) linkage
B) integrated activity
C) complex
D) support activity
E) primary activity

Question 76

A network of value-creating activities is called a

A) business strategy.
B) value network.
C) value chain.
D) competitive advantage.
E) primary value activities.

Question 77

Describe the five stages through which the diffusion of an innovation occurs suggested by Rogers.

Question 78

If a diamond mine buys a diamond cutting operation this is an example of ___________.

A) departmental integration
B) backward integration
C) economy of scale
D) forward integration
E) supporting activity

Question 79

What term is given to Robert Solow's quote,"We see computers everywhere except in the productivity statistics"?

A) The productivity divide
B) The digital divide
C) The efficiency paradox
D) The productivity gap
E) The productivity paradox

Question 80

________ is an example of a support activity in Porter's value chain model.

A) HR benefits management
B) Production
C) Raw materials acquisition
D) Customer service
E) Sales