Deck 3: Achieving Competitive Advantage With Information Systems

Question 1

Benchmarks are specific standards for business processes set by industry leaders.

Answer 1

False

Question 2

The more people that use Microsoft Office software and related products,the lower its value.

Answer 2

False

Question 3

Customers are one of the competitive forces that affect an organization's ability to compete.

Answer 3

True

Question 4

The competitive forces model was created for today's digital firm.

Question 5

The value chain model classifies all company activities as either primary or support.

Question 6

The effect of the Internet has been to raise bargaining power over suppliers.

Question 7

Studies show that about half of a business firm's profits can be explained by alignment of IT with business.

Question 8

A transparent marketplace means that there is high product differentiation.

Question 9

In the value chain model,primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer.

Question 10

Business process reengineering is the radical redesign of business processes.

Question 11

Strong linkages to customers and suppliers increase switching costs.

Question 12

The greatest barrier to changing business processes is ironically,management itself.

Question 13

A firm can be said to have competitive advantage when it has higher stock market valuations than its competitors.

Question 14

Probably the best single way to reduce quality problems is to reduce cycle time.

Question 15

The idea driving synergies is that when the output of some units can be used as inputs to other units,the relationship can lower cost and generate profits.

Question 16

The law of diminishing returns always applies to digital,as well as traditional products.

Question 17

In the age of the Internet,Porter's traditional competitive forces model is still at work,but competitive rivalry has become much more intense.

Question 18

The first movers of a disruptive technology typically benefit the most from the technology;and it is rare that fast followers catch up quickly.

Question 19

BPM is considered concluded when the new processes are both implemented and accepted.

Question 20

In the strategy of product differentiation,information systems are used to enable new products and services.

Question 21

Which of the following illustrates the use of information systems to strengthen customer and supplier intimacy?

A)A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy.
B)A shoe manufacturer's use of information systems in selling custom,made-to-order shoes directly to customers.
C)A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules.
D)A grocery store chain's use of information systems to produce products and services at a lower price than competitors.

Question 22

Which of the following industries has the lowest barrier to entry?

A)Automotive
B)Computer-chip
C)Restaurant
D)Airline

Question 23

Hilton Hotels' use of customer information software to identify the most profitable customers to direct services to is an example of using information systems to:

A)strengthen customer intimacy.
B)differentiate their service.
C)focus on market niche.
D)increase efficiency.

Question 24

A substitute product of most concern for a cable TV distributor is:

A)satellite TV.
B)broadcast TV.
C)satellite radio.
D)the Internet.

Question 25

When a firm provides a specialized product or service for a narrow target market better than competitors,they are using a ________ strategy.

A)product differentiation
B)market niche
C)mass customization
D)process efficiency

Question 26

Walmart's continuous replenishment system allows it to:

A)provide mass customization.
B)provide an efficient customer response system.
C)strengthen customer intimacy.
D)achieve economy of scale.

Question 27

Which of the following is not one of the competitive forces of Porter's model?

A)Suppliers
B)Other competitors
C)External environment
D)Customers

Question 28

All of the following industries have been severely disrupted by the Internet except:

A)air travel.
B)PC manufacturer.
C)publishing.
D)software.

Question 29

An information system can enable a company to focus on a market niche through:

A)complex trend forecasting.
B)tailoring products to the client.
C)intensive product trend analysis.
D)intensive customer data analysis.

Question 30

Internet technology:

A)makes it easy for rivals to compete on price alone.
B)imposes a significant cost of entry,due to infrastructure requirements.
C)increases the difference between competitors because of the wide availability of information.
D)makes it easy to sustain operational advantages.

Question 31

A firm can exercise greater control over its suppliers by having:

A)more suppliers.
B)fewer suppliers.
C)global suppliers.
D)local suppliers.

Question 32

________ is the ability to offer individually tailored products or services using the same production resources as bulk production.

A)Mass customization
B)Size customization
C)Personalization
D)Demand customization

Question 33

The four basic strategies a company can employ to deal with competitive forces are:

A)(1)increase process efficiency,(2)implement demand control,(3)focus on market niche,and (4)low-cost leadership.
B)(1)strengthen customer and supplier intimacy,(2)focus on market niche,(3)product differentiation,and (4)implement demand control.
C)(1)focus on market niche,(2)product differentiation,(3)mass customization,and (4)implement demand control.
D)(1)strengthen customer and supplier intimacy,(2)focus on market niche,(3)product differentiation,and (4)low-cost leadership.

Question 34

The value chain model:

A)categorizes five related advantages for adding value to a firm's products or services.
B)sees the supply chain as the primary activity for adding value.
C)categorizes four basic strategies a firm can use to enhance its value chain.
D)helps a firm identify points at which information technology can most effectively enhance its competitive position.

Question 35

Which of the following illustrates the use of information systems to focus on market niche?

A)A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy.
B)A shoe manufacturer's use of information systems in selling custom,made-to-order shoes directly to customers.
C)A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules.
D)A grocery store chain's use of information systems to produce products and services at a lower price than competitors.

Question 36

Which of the following illustrates the use of information systems to achieve product differentiation?

A)A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy.
B)A shoe manufacturer's use of information systems in selling custom,made-to-order shoes directly to customers.
C)A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules.
D)A grocery store chain's use of information systems to produce products and services at a lower price than competitors.

Question 37

To what competitive force did the printed encyclopedia industry succumb?

A)Positioning and rivalry among competitors
B)Low cost of entry
C)Substitute products or services
D)Customer's bargaining power

Question 38

Which of the following can force a business and its competitors to compete on price alone?

A)High product differentiation
B)Poor process efficiency
C)Demand control
D)Transparent marketplace

Question 39

A manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace forces?

A)Product differentiation
B)Traditional competitors
C)Low number of suppliers
D)New market entrants

Question 40

The Internet raises the bargaining power of customers by:

A)creating new opportunities for building loyal customer bases.
B)making more products available.
C)making information available to everyone.
D)lowering transaction costs.

Question 41

Network economics:

A)applies the law of diminishing returns to communities of users.
B)applies traditional economics to networked users.
C)sees the cost of adding new members as inconsequential.
D)balances the high cost of adding new members to a community against the lower cost of using network infrastructure.

Question 42

An information system can enhance core competencies by:

A)providing better reporting facilities.
B)creating educational opportunities for management.
C)allowing operational employees to interact with management.
D)encouraging the sharing of knowledge across business units.

Question 43

How are information systems used at the industry level to achieve strategic advantage?

A)By building industry-wide,IT-supported consortia and symposia
B)By raising the bargaining power of suppliers
C)By encouraging the entry of new competitors
D)By enforcing standards that reduce the differences between competitors

Question 44

In a ________ system configuration,separate information systems are designed and managed by each foreign unit.

A)duplicated
B)centralized
C)decentralized
D)networked

Question 45

Which of the following best describes business globalization?

A)Businesses whose suppliers are located overseas
B)Businesses selling their products worldwide
C)Businesses moving manufacturing overseas
D)All of the above.

Question 46

In network economics,the value of a commercial software vendor's software products:

A)increases as more people use them.
B)decreases as more people use them.
C)increases due to higher marginal gain in output.
D)decreases according to the law of diminishing returns.

Question 47

The ________ strategy concentrates financial management and control out of a central home base while decentralizing production,sales,and marketing operations to units in other countries.

A)domestic exporter
B)multinational
C)franchise
D)transnational

Question 48

A virtual company:

A)uses the capabilities of other companies without being physically tied to those companies.
B)uses Internet technology to maintain a virtual storefront.
C)uses Internet technology to maintain a networked community of users.
D)provides entirely Internet-driven services,or virtual products.

Question 49

________ systems are those in which development occurs at the home base but operations are handed over to autonomous units in foreign locations.

A)Transnational
B)Decentralized
C)Duplicated
D)Networked

Question 50

Benchmarking:

A)compares the efficiency and effectiveness of your business processes against strict standards.
B)allows industry participants to develop industry-wide standards.
C)is used to measure the speed and responsiveness of information technology.
D)synchronizes the business processes of customers,suppliers,and trading partners.

Question 51

The most successful solutions or methods for achieving a business objective are called:

A)core processes.
B)best processes.
C)benchmarks.
D)best practices.

Question 52

The support activities of a firm include:

A)inbound logistics,technology,outbound logistics,sales and marketing,and service.
B)inbound logistics,organization infrastructure,outbound logistics,technology,and procurement.
C)organization infrastructure,human resources,sales and marketing,and technology.
D)organization infrastructure,human resources,technology,and procurement.

Question 53

The more any given resource is applied to production,the lower the marginal gain in output,until a point is reached where the additional inputs produce no additional output is referred to as:

A)the point of no return.
B)the law of diminishing returns.
C)supply and demand.
D)inelasticity.

Question 54

The primary activities of a firm include:

A)inbound logistics,operations,outbound logistics,sales and marketing,and service.
B)inbound logistics,operations,outbound logistics,technology,and service.
C)procurement,inbound logistics,operations,technology,and outbound logistics.
D)procurement,operations,technology,sales and marketing,and service.

Question 55

A ________ is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively.

A)value chain
B)business network
C)value web
D)consortia

Question 56

A firm's value chain is linked to the:

A)value webs of its industry.
B)value chains of its suppliers,distributors,and customers.
C)value webs of its suppliers and distributors.
D)value chains of its suppliers and customers.

Question 57

When the output of some units can be used as inputs to other units,or if two organizations pool markets and expertise that result in lower costs and generate profits,it is often referred to as creating:

A)value webs.
B)value chains.
C)synergies.
D)core competencies.

Question 58

The greatest impact the Internet has had on globalization is in lowering the costs of:

A)labor.
B)telecommunications.
C)network infrastructure.
D)entry to global-scale operations.

Question 59

The ________ strategy is characterized by heavy centralization of corporate activities in the home country of origin.

A)domestic exporter
B)multinational
C)franchise
D)transnational

Question 60

The emergence of the World Wide Web acted as a disruptive technology for:

A)the typewriter industry.
B)print publishing.
C)PC manufacturers.
D)microprocessor firms.

Question 61

The iPad can be seen as a disruptive technology for the ________ industry.

A)publishing
B)music
C)software
D)travel

Question 62

Franchisers are firms that have their product created,designed,financed,and initially produced in the home country but rely heavily on foreign personnel for further production,marketing,and human resources.

Question 63

A value web is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service for a market.

Question 64

A(n)________ uses networks to link people,assets,and ideas,enabling it to work with other companies to create products and services without being limited by traditional organizational boundaries or physical locations.

A)value web
B)network-based strategy
C)virtual organization
D)global company

Question 65

All of the following are ways to improve quality except:

A)improving products and services based on customer demands.
B)simplifying the production process.
C)implementing a new information system.
D)improving production precision.

Question 66

________ typically develop a single information system,usually at the home base,and then replicate it around the world.

A)Domestic exporters
B)Multinational firms
C)Franchisers
D)Transnational firms

Question 67

The reduction of errors to 3.4 defects per million opportunities is central to the concept of:

A)Six Sigma.
B)TQM.
C)benchmarking.
D)cycle time reduction.

Question 68

Seeing quality as the responsibility of all people and functions in an organization is central to the concept of:

A)Six Sigma.
B)TQM.
C)quality control.
D)cycle time reduction.

Question 69

A ________ is an activity at which a firm excels as a world-class leader.

A)best practice
B)competitive advantage
C)primary activity
D)core competency

Question 70

The activities that measure the performance of your business processes against strict standards are called best practices.

Question 71

As per your reading of the chapter case,which of the four generic business strategies was Starbucks following in implementing its Starbucks Digital Network?

A)Low-cost leadership
B)Product differentiation
C)Focus on market niche
D)Customer and supplier intimacy

Question 72

All of the following have been disruptive technologies except:

A)the PageRank algorithm.
B)the flash drive.
C)minicomputers.
D)the iPod.

Question 73

The ________ model highlights the primary or support activities that add a margin of value to a firm's products or services where information systems can best be applied to achieve a competitive advantage.

A)value chain
B)core competency
C)network economy
D)Porter

Question 74

Mass customization allows a company to offer individually-tailored products using the same production resources as mass production.

Question 75

As per your reading of the chapter opening case,which competitive force does Skype represent to AT&T?

A)Traditional competitor
B)Substitute product or service
C)New market entrant
D)Supplier

Question 76

A micromultinational is a small firm operating on a global scale.

Question 77

Quality control is seen as an end in itself in Six Sigma.

Question 78

In some instances,BPM will lead to a paradigm shift that transforms the nature of the business itself.

Question 79

A firm that locates all systems development and operations at its headquarters is using a ________ system configuration.

A)unilateral
B)centralized
C)decentralized
D)networked

Question 80

Which of the following does not describe a difference between the way customers and producers see quality?

A)For a consumer,quality means uniformity of the product.
B)Consumers are concerned with the quality of the service.
C)A consumer view of quality includes its durability and safety.
D)For a producer,quality can be measured with a test.