Question 1

FunText is a company that owns an app used for text messaging. It recently offered a six month membership extension to its existing customers without any additional charges. Which competitive strategy is FunText trying to implement in this scenario?

Accepted Answer

FunText is implementing a locking in customers strategy by offering a six month membership extension to its existing customers without any additional charges. This is done to ensure that existing customers stay loyal to the brand and do not shift to another text messaging app.

Question 2

The International Zoological club publishes a monthly magazine for zoology enthusiasts. Members are required to pay an initial fee to cover the first two years of the subscription when registering with the club. In this scenario, the International Zoological club is ________.

Accepted Answer

By requiring members to pay an initial fee to cover the first two years of the subscription, the International Zoological club is locking in customers and ensuring their continued subscription for at least two years.

Question 3

Streamtech, a manufacturer of automobiles, recently received a patent for an unmanned search boat. By doing this, Streamtech has ________.

Accepted Answer

Streamtech has introduced product differentiation by receiving a patent for an unmanned search boat, which sets their product apart from competitors.

Question 4

Hueblue Software, an application provider to the gaming industry, decided to enhance its portfolio by developing motion-control-enabled games for the mobile gaming industry. In this scenario, which competitive strategy is Hueblue Software implementing?

Accepted Answer

Hueblue Software is implementing a product differentiation strategy by enhancing its portfolio with motion-control-enabled games. This strategy focuses on offering a unique product or service that stands out from competitors, which can help attract and retain customers.

Question 5

What is a business process? How do you determine the cost and margin of a business process?

Accepted Answer

The answer of What is a business process? How do...

Question 6

The sales process involves sales and marketing as well as outbound logistics activities.

Accepted Answer

The sales process involves activities such as identifying potential customers, promoting products or services, closing sales, and delivering goods or services to customers, which include sales and marketing as well as outbound logistics activities.

Question 7

A large software manufacturer attempts to lock in customers by making it difficult for them to substitute their software with one from another company. The strategy used by the company is referred to as ________.

Accepted Answer

The strategy described is known as the switching costs strategy, which involves making it difficult for customers to switch to a competitor's product by creating barriers such as high switching costs, complex interfaces, or proprietary file formats.

Question 8

In a manufacturing business, the materials ordering process transforms cash into a raw materials inventory.

Accepted Answer

The materials ordering process involves the purchase of raw materials with cash, which then become a part of the company's raw materials inventory.

Question 9

An inventory of raw materials is an example of a repository.

Accepted Answer

A repository is a place where things are stored or kept. An inventory of raw materials is a collection or stock of items that are kept or stored for future use. Therefore, an inventory of raw materials can be considered a repository.

Question 10

RAC Associates is a car rental company that rents cars to tourists in the United States. The company uses tracking devices and magnetic locks to prevent car theft. These procedures are examples of ________.

Accepted Answer

The use of tracking devices and magnetic locks are supporting business processes that help ensure the safety and security of the rental cars.

Question 11

Organizations can lock in suppliers either by making it difficult to switch to another organization or by ________.

Accepted Answer

Organizations can lock in suppliers by making it easy to work with them, fostering a strong relationship and creating a dependency that discourages suppliers from switching to competitors.

Question 12

Each activity in a business process is a business function that receives inputs and produces outputs.

Accepted Answer

Each activity in a business process is a business function that receives inputs and produces outputs, which is the fundamental concept of process mapping and analysis.

Question 13

The cost of the business process is the cost of the inputs plus the cost of the outputs.

Accepted Answer

The cost of the business process primarily includes the cost of the inputs and the operational costs involved in transforming these inputs into outputs, but not the cost of the outputs themselves.

Question 14

As the purchasing manager of a company that designs costumes, Natalie orders yards of fabric in preparation for Halloween. Natalie's duties can be classified under the ________ category of a business process.

Accepted Answer

Natalie's duties involve ordering materials (fabric) needed for production, which falls under inbound logistics. Inbound logistics refers to the procurement and handling of raw materials and resources needed for manufacturing or production processes.

Question 15

Which of the following principles of competitive advantage is associated with product implementations?

Accepted Answer

Differentiating service offerings is associated with product implementations as it involves creating unique and valuable features in products or services that stand out in the market and appeal to customers, thereby giving the company a competitive advantage. Locking in customers, locking in suppliers, establishing alliances, and raising barriers to market entry are all associated with different principles of competitive advantage.

Question 16

The streamlining of business processes to increase margin is key to obtaining competitive advantage.

Accepted Answer

Streamlining business processes can help reduce waste, improve efficiency, and ultimately increase margin, giving a company a competitive advantage over others who may not have streamlined their processes.

Question 17

________ is a means through which an organization can gain a competitive advantage through process implementations.

Accepted Answer

Establishing alliances can help an organization gain a competitive advantage by allowing it to access new markets, technologies, or resources.

Question 18

Cooper, the owner of a small bicycle manufacturing company, is striving to keep his organization running smoothly while remaining profitable in a highly competitive market. Cooper chooses process implementation to give his company a competitive edge over others. Which of the following principles is he most likely to implement?

Accepted Answer

Cooper is looking to remain profitable in a highly competitive market, so he is most likely to implement the principle of reducing costs. This will help him maintain his profit margins and remain competitive in the market. While creating new products, enhancing services, differentiating products, and redesigning existing products may also help him gain a competitive edge, they may involve higher costs, which is not in line with his objective of remaining profitable.

Question 19

Locking in customers by making it difficult or expensive for customers to move to another product is called establishing high ________.

Accepted Answer

Switching costs refer to the costs or difficulties a customer may incur in moving from one product or brand to another. By making it expensive or difficult to switch, a company can establish high switching costs, which can help lock in customers.

Question 20

Which of the following statements is True of business process designs?

Accepted Answer

Business process designs typically involve changes to the way people work, so it is likely that most designs will require people to work in new ways.

Answer: C
 Accompanying a process design with a change in management can help ensure effective implementation and adoption of the new processes.

Answer: E
 Process designs may not always map directly to existing work processes, as they may involve new or streamlined steps that differ from current workflows. Therefore, this statement is false.

Therefore, the correct choices are A and C.

Quiz 3: Strategy and Information Systems