Deck 2: Competing With Information Technology

Question 1

Competition is a negative characteristic in business that can require significant resources to overcome.

Answer 1

False

Question 2

When a firm makes such radical changes to its business processes for producing products and services that it alters the fundamental structure of an industry, it is pursuing an innovation strategy.

Answer 2

True

Question 3

Investments in information technology can allow a business to lock in customers and suppliers, and lock out competitors, by building valuable new relationships with them.

Answer 3

True

Question 4

When an organization uses information technology to develop products, services and capabilities in order to gain a strategic advantage over competitive forces in the global marketplace, it is using information systems in a strategic role.

Question 5

A company that places a strategic focus on customer value recognizes that quality, rather than price, has become a primary determinant in a customer's perception of value.

Question 6

An innovation strategy may allow a firm to focus its products or services and gain an advantage in a particular segment or niche of a market.

Question 7

If a key supplier's bargaining power gets too strong, it can force the price of goods and services to unmanageably high levels.

Question 8

Companies like Wal-Mart use information technology to implement competitive strategies for strategic advantage.

Question 9

When a firm develops ways to differentiate its products from a competitor's, it is pursuing a cost leadership strategy.

Question 10

When a business effectively builds in switching costs, its customers and/or suppliers become reluctant to switch to another competitor.

Question 11

When a firm uses IT to create virtual organizations of business partners, it is pursuing a growth strategy.

Question 12

In the Internet world, a firm's biggest competitor may be one that is not yet in the marketplace but could emerge almost overnight.

Question 13

A strategic use of information technology would be to leverage investment in information system specialists, hardware, software, databases, and networks from operational uses into strategic applications.

Question 14

Most products and services have some sort of substitute available to the consumer.

Question 15

Not everything innovative will serve to differentiate one organization from another.

Question 16

Internet technologies can make customers the focal point of customer relationship management (CRM) and other e-business applications.

Question 17

Companies that consistently offer the best value from the customer's perspective must provide two key services: keeping track of their individual customers' preferences and selling products or services at lowest price.

Question 18

The threat of new entrants is often at its strongest during periods of rising costs or inflation.

Question 19

A given activity can fall into one or more of the categories of competitive strategy.

Question 20

If an organization offers its online package tracking system in a manner that allows its customers to access shipment information not only via a computer, but via a mobile phone as well, then such an action could fall into both the differentiation and innovation strategy categories.

Question 21

Information technology plays a major role in the business process reengineering of most business processes.

Question 22

An agile company cooperates with its suppliers and competitors.

Question 23

Becoming an agile company depends on customer perceptions of products and services, as much as any other strategy.

Question 24

All the employees within a marketing department, from clerical staff to top managers, form a cross-functional team.

Question 25

Many companies have found that organizational redesign approaches are an important enabler of business process reengineering.

Question 26

Business process reengineering (BPR) combines a strategy of promoting business innovation with a strategy of making major improvements to business operations so that a company can become a much stronger and more successful competitor in the marketplace.

Question 27

Yahoo! transformed its service from a search engine into a portal by dedicating one branch of its business to providing content and other media-related services.

Question 28

The value chain concept can help managers decide where and how to apply the strategic capabilities of information technology.

Question 29

By nurturing an entrepreneurial spirit, an agile company provides powerful incentives for employee responsibility, adaptability, and innovation.

Question 30

As an organization's learning process continues and its knowledge base expands, the knowledge creating company works to integrate its knowledge into its business processes, products, and services.

Question 31

When using the value chain concept, managers should seek to develop strategic information systems for those activities that they view as the "weakest link" in the value chain.

Question 32

One of the reasons people form virtual companies is to keep new entrants out of a market.

Question 33

Knowledge-creating companies constantly create new business knowledge and then disseminate it throughout the company in order to quickly build the new knowledge into their products and services.

Question 34

Successful knowledge management creates techniques, technologies, and rewards for getting employees to share what they know and to make better use of accumulated workplace knowledge.

Question 35

Information technology can enable a company to develop relationships with its customers in virtual communities.

Question 36

Business process reengineering (BPR) is most often called streamlining.

Question 37

Explicit knowledge involves the "how-to" knowledge that resides in workers.

Question 38

The value chain framework can be used to view a firm as a series, a chain, or a network of basic activities that add value to its products and services, and thus add a margin of value to the firm.

Question 39

Although the potential payback of reengineering is high, so is the risk of failure and level of disruption to the organizational environment of the firm.

Question 40

According to the value chain concept, primary processes include such things as the procurement of resources and human resource management that are directly related to the manufacturing of products or delivery of services to the customer.

Question 41

According to the text, the Internet:

A) Has limited competition world-wide
B) Has created many ways to enter the market quickly, with relatively low cost
C) Has created new entry barriers to competition
D) Has decreased prices world-wide

Question 42

A(n) _______________ strategy is a competitive strategy by which a firm develops ways to differentiate its products and services from those of its competitors.

A) low cost leadership
B) innovation
C) differentiation
D) growth

Question 43

A(n) _______________ strategy is a competitive strategy by which a firm seeks to become a low-cost producer of products and services in the industry.

A) low cost leadership
B) differentiation
C) innovation
D) alliance

Question 44

Which of the following is a competitive force in the marketplace?

A) Cost leadership
B) Competition
C) Differentiation
D) Alliances

Question 45

All of the following are competitive forces in the marketplace except:

A) Alliances
B) Competition
C) Substitutes
D) Bargaining

Question 46

The practice of becoming the largest purchaser of products from a given supplier is an example of:

A) Cost leadership
B) Growth strategies
C) Differentiation
D) Locking in the supplier

Question 47

Developing a relationship with a customer such that the customer cannot afford to switch suppliers is an example of:

A) Monopolistic enterprise
B) Locking in the customer
C) Growth strategies
D) None of the above is correct

Question 48

A(n) _______________ strategy is a competitive strategy by which a firm develops unique products or services from those of its competitors, or makes radical business changes that may alter the fundamental nature of the industry.

A) alliance
B) growth
C) differentiation
D) innovation

Question 49

Which of the following is a competitive strategy?

A) New entries into the market
B) Innovation
C) Bargaining power
D) Substitutes

Question 50

A(n) _______________ strategy is a competitive strategy by which a firm establishes new business linkages with customers, suppliers, competitors, and other companies.

A) growth
B) low cost leadership
C) differentiation
D) alliance

Question 51

All of the following are basic competitive forces discussed in the text except:

A) Rivalry of competitors
B) Threat of substitutes
C) Bargaining power of suppliers
D) Bargaining power of competitors

Question 52

All the following are competitive strategies except:

A) New entries into the market
B) Innovation
C) Cost leadership
D) Alliances

Question 53

Becoming a low-cost producer of products and services in an industry is an example of a(n):

A) Cost leadership strategy
B) Differentiation strategy
C) Innovation strategy
D) Growth strategy

Question 54

According to the text, competition is a _______________ characteristic in business that _______________.

A) positive, is natural and healthy
B) negative, can consume significant resources
C) neutral, can help a firm meet strategic enterprise objectives
D) none of the choices are correct.

Question 55

A strategic information system can be any kind of information system that uses information technology to help an organization _______________.

A) gain a competitive advantage
B) reduce a competitive disadvantage
C) meet strategic enterprise objectives
D) all of the choices are correct.

Question 56

According to the text, in the world of the Internet, a firm's biggest competitor:

A) Usually exists and is close in the physical world
B) Usually does not exist but will emerge close in the physical world
C) May not yet exist but could emerge almost overnight
D) Probably exists in an overseas location

Question 57

A firm can survive and succeed in the long run if it successfully develops strategies to confront the _______________ that shape the structure of competition in its industry.

A) technological innovations
B) competitive business processes
C) competitive forces
D) competitive strategies

Question 58

All of the following are basic competitive strategies discussed in the text except:

A) Cost leadership
B) Innovation
C) Product differentiation
D) Strategic dominance

Question 59

A(n) _______________ strategy is a competitive strategy by which a firm significantly expands its capacity to produce goods and services, expanding and diversifying in the market.

A) alliance
B) growth
C) differentiation
D) innovation

Question 60

All of the following can be used to counter competitive forces in the marketplace except:

A) Alliances
B) Growth
C) Innovation
D) Bargaining

Question 61

Expanding a company's product offering into global markets is an example of a(n) _______________ strategy.

A) cost leadership
B) differentiation
C) growth
D) alliance

Question 62

A transaction database allows all of the following activities except:

A) Linking employees and distribution partners to customers
B) Letting customers check order history
C) Giving employees a complete view of each customer
D) None of these activities are supported by a transaction database.

Question 63

A customer-focused business can build customer value and loyalty by:

A) Making a loyal customer feel special with website personalization
B) Letting customers place orders directly, or through distribution partners
C) Letting customers check order history and delivery status
D) All of the choices are correct.

Question 64

According to the textbook case, innovation in information systems at Universal Orlando comes from thinking like a:

A) Customer
B) Competitor
C) Employee
D) IT specialist

Question 65

Which of the following is a primary business process?

A) Collaborative workflow intranet
B) Targeted marketing
C) Technology development
D) Procurement of resources

Question 66

A company that places a strategic focus on customer value recognizes that __________, rather than __________, has become a primary determinant in a customer's perception of value.

A) service, price
B) price, quality
C) quality, service
D) quality, price.

Question 67

All of the following are primary business processes, except:

A) Customer relationship management
B) Targeted marketing
C) Technology development
D) Just-in-time warehousing

Question 68

When a firm develops ways to differentiate their products and services from their competitors', it is pursuing a _______________ strategy.

A) differentiation
B) alliance
C) innovation
D) marketing

Question 69

When customers become dependent on mutually beneficial inter-enterprise information systems, they become reluctant to switch to a company's competitors because they would incur all following costs except:

A) Time
B) Money
C) Innovation
D) Effort

Question 70

Companies like Wal-Mart extend their networks to their customers and suppliers in order to build innovative continuous inventory replenishment systems that would lock in their business. This creates a(n) _______________ information system.

A) leveraged
B) inter-enterprise
C) intra-enterprise
D) locked-in

Question 71

All of the following are support processes, except:

A) Customer relationship management
B) Procurement of resources
C) Technology development
D) Employee benefits intranet

Question 72

The value chain framework can be used to view a firm as a series, a chain, or a network of basic activities that:

A) Add value to its products and services, and thus add a margin of value to the firm.
B) Lower costs along the product development chain.
C) Create the perception of value and goodwill to employees.
D) Create a smooth-flowing chain of events between the supplier and the customer.

Question 73

Companies that consistently offer the best value from the customer's perspective do all the following, except:

A) Keep track of their customers' individual preferences
B) Keep up with market trends
C) Supply products, services, and information anytime, anywhere
D) Offer lowest prices and fastest delivery

Question 74

In addition to the five basic competitive strategies, the text describes several key strategies implemented with information technology. Which of the following is not one of those strategies?

A) Locking in customers
B) Building switching costs
C) Creating alliances
D) Raising barriers to entry

Question 75

Investments in information technology that build valuable new relationships allow a firm to:

A) Lock in the supplier
B) Lock in the customer
C) Lock out competition
D) All the above

Question 76

Which of the following is a support process?

A) Collaborative workflow intranet
B) Targeted marketing
C) Customer relationship management
D) Just-in-time warehousing

Question 77

A serious problem of competitive advantage is that:

A) It normally doesn't last very long and it isn't sustainable over the long term
B) Competitors figure out how it was done and do the same thing
C) A competitive advantage can become a competitive necessity
D) All of the choices are correct.

Question 78

Using an information system to make customers and/or suppliers reluctant to change to another competitor is called:

A) Growth strategy
B) Building switching costs
C) Creating alliances
D) Raising barriers to entry

Question 79

A sales company such as eBay would be most likely to use information technology to promote _______________.

A) online stock trading
B) point-of-sale inventory tracking
C) online auctions
D) virtual manufacturing alliances

Question 80

When a firm strives to find ways to help its suppliers and customers reduce their costs or to increase the costs of their competitors, it is pursuing a strategy of _______________.

A) innovation
B) alliance
C) cost leadership
D) growth