Deck 3: Information Systems, Organizations, and Strategy

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Question
How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?

A) It sees information systems as a way to rearrange the inputs and outputs of the organization.
B) It sees capital and labor as primary production factors.
C) It sees an organization as a collection of rights, privileges, obligations, and responsibilities.
D) It sees the organization as a social structure similar to a machine.
E) It sees the inputs and outputs, labor and capital, as being infinitely malleable.
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Question
________ technologies radically change the business landscape and environment.

A) Explosive
B) Inventive
C) Disruptive
D) Subversive
E) Divisive
Question
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as

A) switching costs.
B) network costs.
C) procurement.
D) agency costs.
E) transaction costs.
Question
Some organizations lack bedrock, unassailable assumptions that define their goals and products.
Question
All of the following are considered disruptive technologies except

A) instant messaging.
B) e-mail.
C) Internet telephony.
D) PCs.
E) smartphones.
Question
How are the technical and behavioral definitions of an organization different?
Question
Business processes are collections of

A) informal practices and behaviors.
B) formalized and documented practices.
C) business rules.
D) rights and privileges.
E) routines.
Question
A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.
Question
The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as

A) culture.
B) politics.
C) structure.
D) viewpoints.
E) variance.
Question
An organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment according to the ________ definition of organizations.

A) microeconomic
B) macroeconomic
C) sociotechnical
D) behavioral
E) psychological
Question
Along with capital, ________ is the primary production input that the organization uses to create products and services.

A) structure
B) culture
C) politics
D) natural resources
E) labor
Question
An example of a divisionalized bureaucracy is a

A) startup firm.
B) university.
C) Fortune 500 firm.
D) midsize manufacturer.
E) consulting firm.
Question
Routines are also called standard operating procedures.
Question
An organization is a

A) stable, formal social structure that takes resources from the environment and processes them to produce outputs.
B) formal, legal entity with internal rules and procedures that must abide by laws.
C) a collection of people and other social elements.
D) B and C
E) A, B, and C
Question
Which of the following is not a major feature of organizations that impacts the use of information systems?

A) business processes
B) environments
C) goals
D) agency costs
E) leadership styles
Question
Under Mintzberg's classification of organizational structure, the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals falls under the category of

A) entrepreneurial structures.
B) divisionalized bureaucracies.
C) professional bureaucracies.
D) adhocracies.
E) machine bureaucracies.
Question
Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________ bureaucracy.

A) machine
B) professional
C) divisionalized
D) multidivisional
E) ad hoc
Question
The interaction between information systems and organizations is influenced

A) primarily by the decision making of middle and senior managers.
B) by the development of new information technologies.
C) by many factors, including structure, politics, culture, and environment.
D) by two main microeconomic forces: capital and labor.
E) by management decisions.
Question
According to agency theory, the firm is viewed as a(n)

A) unified, profit-maximizing entity.
B) task force organization that must respond to rapidly changing environments.
C) entrepreneurial endeavor.
D) "nexus of contracts" among self-interested individuals.
E) entrepreneurial structure.
Question
All of the following statements are true about information technology's impact on business firms except

A) it helps firms expand in size.
B) it helps firms lower the cost of market participation.
C) it helps reduce internal management costs.
D) it helps reduce transaction costs.
E) it helps reduce agency costs.
Question
The four major competitive strategies are

A) low-cost leadership, substitute products and services, customers; and suppliers.
B) low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy.
C) new market entrants, substitute products and services, customers, and suppliers.
D) low-cost leadership, new market entrants, product differentiation, and focus on market niche.
E) customers, suppliers, new market entrants, and substitute products.
Question
Nike's forays into information technology represent an effort to

A) maintain low-cost leadership.
B) focus on market niche.
C) strengthen customer and supplier intimacy.
D) perform intensive customer data analysis.
E) achieve product differentiation.
Question
All of the following are IT-enabled products and services providing competitive advantage except

A) Amazon's one-click shopping.
B) Apple's iPod and iTunes.
C) Ping's golf club customization.
D) PayPal's online person-to-person payment system.
E) Walmart's RetailLink system.
Question
A substitute product of most concern for a cable TV distributor is

A) satellite TV.
B) broadcast TV.
C) satellite radio.
D) the Internet.
E) terrestrial radio.
Question
Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete?

A) network economics model
B) competitive forces model
C) competitive advantage model
D) demand control model
E) agency costs model
Question
Walmart's attempts to increase its online presence is an example of a firm using information systems to

A) strengthen ties to its customers.
B) simplify the industry value chain.
C) develop synergies.
D) focus on market niche.
E) achieve low-cost leadership.
Question
The ability to offer individually tailored products or services using the same production resources as bulk production is known as

A) customized response.
B) size customization.
C) magnitude customization.
D) dimension customization.
E) mass customization.
Question
List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each.
Question
In environmental scanning, a firm may use information systems to

A) utilize sensors that track products through the value chain.
B) analyze external Internet traffic to its Web sites.
C) identify external events that may affect it.
D) understand its carbon footprint and energy impacts on the environment.
E) develop a unified organizational culture.
Question
Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates a use of information services for

A) low-cost leadership.
B) marketing effectiveness.
C) focusing on market niche.
D) strengthening supplier intimacy.
E) developing synergies.
Question
According to research on organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are

A) environment, organization, structure, and tasks.
B) technology, people, culture, and structure.
C) organization, culture, management, and environment.
D) tasks, technology, people, and structure.
E) costs, tasks, structure, and management.
Question
All of the following are competitive forces except

A) suppliers.
B) new market entrants.
C) external environment.
D) customers.
E) substitute products.
Question
Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors.

A) product differentiation
B) market niche
C) mass customization
D) process efficiency
E) low-cost leadership
Question
As discussed in the chapter opening case, which of the four generic strategies did T.J. Maxx employ to combat the competition offered by Target, Kohls, Walmart, Macy's and pure online stores likeRue LaLa and Gilt Groupe?

A) market niche focus
B) customer and supplier intimacy
C) network-based strategy
D) product synergies
E) efficient customer response
Question
Which of the following industries has a low barrier to entry?

A) automotive
B) computer chip
C) national retailer
D) airline
E) restaurant
Question
Walmart's continuous replenishment system allows it to

A) provide mass customization.
B) differentiate products.
C) strengthen customer intimacy.
D) achieve economy of scale.
E) achieve low-cost leadership.
Question
Information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor from the point of view of economics.
Question
A firm can exercise greater control over its suppliers by having

A) more suppliers.
B) fewer suppliers.
C) global suppliers.
D) local suppliers.
E) regional suppliers.
Question
A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.

A) product differentiation
B) traditional competitors
C) low number of suppliers
D) new market entrants
E) low number of customers
Question
Which of the following best illustrates the use of information systems to focus on market niche?

A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing.
B) A restaurant chain analyzing local sales figures to determine which menu items to serve.
C) A bookseller selling an e-book reader that reads only the bookseller's books.
D) A department store creating specialized products for preferred customers.
E) A clothes manufacturer expanding its offerings to new styles.
Question
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.
E) uses networks to link people, assets, and ideas.
Question
All of the following industries have been disrupted by the Internet except

A) encyclopedias.
B) newspapers.
C) music.
D) air travel.
E) clothing.
Question
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.
E) enabling the development of new services.
Question
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) highlights specific activities in the business where competitive strategies can best be applied.
E) enables more effective product differentiation.
Question
An example of synergy in business is

A) Amazon's use of the Internet to sell books.
B) Bank of America acquiring Countrywide Financial to reach a large pool of new customers.
C) Blockbuster combining traditional video rental with online video rental.
D) Walmart's order entry and inventory management system to coordinate with suppliers.
E) Nike's use of technology to improve its product offerings.
Question
An example of a keystone firm within a business ecosystem is

A) Apple and software application writers in the mobile platform ecosystem.
B) GUESS and the fashion ecosystem.
C) Citibank and the ATM ecosystem.
D) American Airlines and the computerized reservation ecosystem.
E) Nike and the athletic apparel ecosystem.
Question
Which of the following represent the primary activities of a firm?

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 services
E) organization infrastructure, human resources, technology, and procurement
Question
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. This is referred to as

A) the point of no return.
B) the law of diminishing returns.
C) supply and demand.
D) network inelasticity.
E) the invisible hand.
Question
A virtual company

A) uses networks to link people, assets, and ideas.
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.
E) is limited by traditional organizational boundaries.
Question
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) competitive forces
B) value chain
C) bargaining power
D) new entrant
E) rivalry
Question
Which of the following is one of the support activities in a firm's value chain?

A) inbound logistics
B) operations
C) sales and marketing
D) service
E) technology
Question
An activity businesses perform to measure and compare business processes to similar processes of other companies within their industry is

A) benchmarking.
B) best practices.
C) value chain analysis.
D) strategic systems analysis.
E) secondary activities.
Question
How do information systems enhance core competencies?

A) by providing better reporting facilities
B) by creating educational opportunities for management
C) by allowing operational employees to interact with management
D) by encouraging the sharing of knowledge across business units
E) by fostering synergies among departments
Question
When two organizations pool markets and expertise that result in lower costs and generate profits, it is referred to as creating

A) a value web.
B) a value chain.
C) net marketplaces.
D) core competencies.
E) synergies.
Question
A competitive force challenging the publishing industry is

A) positioning and rivalry among competitors.
B) low cost of entry.
C) substitute products or services.
D) customers' bargaining power.
E) suppliers' bargaining power.
Question
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.

A) Product differentiation
B) Low-cost leadership
C) Customer efficiency
D) Mass customization
E) Switching cost
Question
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
E) by decreasing switching costs
Question
The expenses incurred by a customer or company in lost time and resources when changing from one supplier or system to a competing supplier or system are known as

A) retention costs.
B) preservation costs.
C) differentiation costs.
D) switching costs.
E) variation costs.
Question
What are the most successful solutions or methods for achieving a business objective?

A) value activities
B) best processes
C) core competencies
D) best practices
E) benchmarks
Question
A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n)

A) industry value chain.
B) business ecosystem.
C) value web.
D) consortia.
E) synergy chain.
Question
Switching costs increase when customers are strongly linked to products and platforms.
Question
High product differentiation is a sign of a transparent marketplace.
Question
A(n) ________ 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.

A) value chain
B) support web
C) value web
D) consortium
E) firm network
Question
'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits.
Question
You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better Bodies use in applying information services to achieve a competitive advantage?
Question
In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer.
Question
The value chain model classifies all company activities as primary activities.
Question
Customers are one of the competitive forces that affect an organization's ability to compete.
Question
A(n) ________ is an activity at which a firm excels as a world-class leader.

A) expertise area
B) competitive advantage
C) growth driver
D) efficiency
E) core competency
Question
The effect of the Internet has been to decrease the bargaining power of customers.
Question
A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.
Question
The parts of an organization's infrastructure, human resources, technology, and procurement that make the delivery of the firm's products or services possible are known as ________ activities.

A) primary
B) auxiliary
C) secondary
D) service
E) support
Question
The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms.
Question
Information systems are used to enable new products and services via product differentiation.
Question
In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site.
Question
An efficient customer response system directly links consumer behavior to distribution and production and supply chains.
Question
Mass customization offers individually tailored products or services using the same resources as mass production.
Question
You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert?
Which ones will it have difficulty exercising?
Question
The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.
Question
The text describes Michael Porter's view of the Internet as somewhat negative. What negative influences does Porter see?
Describe several positive influences the Internet has on business. Do these outweigh the negative influences?
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Deck 3: Information Systems, Organizations, and Strategy
1
How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?

A) It sees information systems as a way to rearrange the inputs and outputs of the organization.
B) It sees capital and labor as primary production factors.
C) It sees an organization as a collection of rights, privileges, obligations, and responsibilities.
D) It sees the organization as a social structure similar to a machine.
E) It sees the inputs and outputs, labor and capital, as being infinitely malleable.
E
2
________ technologies radically change the business landscape and environment.

A) Explosive
B) Inventive
C) Disruptive
D) Subversive
E) Divisive
C
3
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as

A) switching costs.
B) network costs.
C) procurement.
D) agency costs.
E) transaction costs.
E
4
Some organizations lack bedrock, unassailable assumptions that define their goals and products.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
5
All of the following are considered disruptive technologies except

A) instant messaging.
B) e-mail.
C) Internet telephony.
D) PCs.
E) smartphones.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
6
How are the technical and behavioral definitions of an organization different?
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
7
Business processes are collections of

A) informal practices and behaviors.
B) formalized and documented practices.
C) business rules.
D) rights and privileges.
E) routines.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
8
A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
9
The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as

A) culture.
B) politics.
C) structure.
D) viewpoints.
E) variance.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
10
An organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment according to the ________ definition of organizations.

A) microeconomic
B) macroeconomic
C) sociotechnical
D) behavioral
E) psychological
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
11
Along with capital, ________ is the primary production input that the organization uses to create products and services.

A) structure
B) culture
C) politics
D) natural resources
E) labor
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
12
An example of a divisionalized bureaucracy is a

A) startup firm.
B) university.
C) Fortune 500 firm.
D) midsize manufacturer.
E) consulting firm.
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Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
13
Routines are also called standard operating procedures.
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k this deck
14
An organization is a

A) stable, formal social structure that takes resources from the environment and processes them to produce outputs.
B) formal, legal entity with internal rules and procedures that must abide by laws.
C) a collection of people and other social elements.
D) B and C
E) A, B, and C
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
15
Which of the following is not a major feature of organizations that impacts the use of information systems?

A) business processes
B) environments
C) goals
D) agency costs
E) leadership styles
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
16
Under Mintzberg's classification of organizational structure, the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals falls under the category of

A) entrepreneurial structures.
B) divisionalized bureaucracies.
C) professional bureaucracies.
D) adhocracies.
E) machine bureaucracies.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
17
Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________ bureaucracy.

A) machine
B) professional
C) divisionalized
D) multidivisional
E) ad hoc
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
18
The interaction between information systems and organizations is influenced

A) primarily by the decision making of middle and senior managers.
B) by the development of new information technologies.
C) by many factors, including structure, politics, culture, and environment.
D) by two main microeconomic forces: capital and labor.
E) by management decisions.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
19
According to agency theory, the firm is viewed as a(n)

A) unified, profit-maximizing entity.
B) task force organization that must respond to rapidly changing environments.
C) entrepreneurial endeavor.
D) "nexus of contracts" among self-interested individuals.
E) entrepreneurial structure.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
20
All of the following statements are true about information technology's impact on business firms except

A) it helps firms expand in size.
B) it helps firms lower the cost of market participation.
C) it helps reduce internal management costs.
D) it helps reduce transaction costs.
E) it helps reduce agency costs.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
21
The four major competitive strategies are

A) low-cost leadership, substitute products and services, customers; and suppliers.
B) low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy.
C) new market entrants, substitute products and services, customers, and suppliers.
D) low-cost leadership, new market entrants, product differentiation, and focus on market niche.
E) customers, suppliers, new market entrants, and substitute products.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
22
Nike's forays into information technology represent an effort to

A) maintain low-cost leadership.
B) focus on market niche.
C) strengthen customer and supplier intimacy.
D) perform intensive customer data analysis.
E) achieve product differentiation.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
23
All of the following are IT-enabled products and services providing competitive advantage except

A) Amazon's one-click shopping.
B) Apple's iPod and iTunes.
C) Ping's golf club customization.
D) PayPal's online person-to-person payment system.
E) Walmart's RetailLink system.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
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.
E) terrestrial radio.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
25
Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete?

A) network economics model
B) competitive forces model
C) competitive advantage model
D) demand control model
E) agency costs model
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
26
Walmart's attempts to increase its online presence is an example of a firm using information systems to

A) strengthen ties to its customers.
B) simplify the industry value chain.
C) develop synergies.
D) focus on market niche.
E) achieve low-cost leadership.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
27
The ability to offer individually tailored products or services using the same production resources as bulk production is known as

A) customized response.
B) size customization.
C) magnitude customization.
D) dimension customization.
E) mass customization.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
28
List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
29
In environmental scanning, a firm may use information systems to

A) utilize sensors that track products through the value chain.
B) analyze external Internet traffic to its Web sites.
C) identify external events that may affect it.
D) understand its carbon footprint and energy impacts on the environment.
E) develop a unified organizational culture.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
30
Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates a use of information services for

A) low-cost leadership.
B) marketing effectiveness.
C) focusing on market niche.
D) strengthening supplier intimacy.
E) developing synergies.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
31
According to research on organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are

A) environment, organization, structure, and tasks.
B) technology, people, culture, and structure.
C) organization, culture, management, and environment.
D) tasks, technology, people, and structure.
E) costs, tasks, structure, and management.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
32
All of the following are competitive forces except

A) suppliers.
B) new market entrants.
C) external environment.
D) customers.
E) substitute products.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
33
Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors.

A) product differentiation
B) market niche
C) mass customization
D) process efficiency
E) low-cost leadership
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
34
As discussed in the chapter opening case, which of the four generic strategies did T.J. Maxx employ to combat the competition offered by Target, Kohls, Walmart, Macy's and pure online stores likeRue LaLa and Gilt Groupe?

A) market niche focus
B) customer and supplier intimacy
C) network-based strategy
D) product synergies
E) efficient customer response
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
35
Which of the following industries has a low barrier to entry?

A) automotive
B) computer chip
C) national retailer
D) airline
E) restaurant
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
36
Walmart's continuous replenishment system allows it to

A) provide mass customization.
B) differentiate products.
C) strengthen customer intimacy.
D) achieve economy of scale.
E) achieve low-cost leadership.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
37
Information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor from the point of view of economics.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
38
A firm can exercise greater control over its suppliers by having

A) more suppliers.
B) fewer suppliers.
C) global suppliers.
D) local suppliers.
E) regional suppliers.
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
k this deck
39
A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.

A) product differentiation
B) traditional competitors
C) low number of suppliers
D) new market entrants
E) low number of customers
Unlock Deck
Unlock for access to all 90 flashcards in this deck.
Unlock Deck
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40
Which of the following best illustrates the use of information systems to focus on market niche?

A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing.
B) A restaurant chain analyzing local sales figures to determine which menu items to serve.
C) A bookseller selling an e-book reader that reads only the bookseller's books.
D) A department store creating specialized products for preferred customers.
E) A clothes manufacturer expanding its offerings to new styles.
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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.
E) uses networks to link people, assets, and ideas.
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42
All of the following industries have been disrupted by the Internet except

A) encyclopedias.
B) newspapers.
C) music.
D) air travel.
E) clothing.
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43
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.
E) enabling the development of new services.
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44
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) highlights specific activities in the business where competitive strategies can best be applied.
E) enables more effective product differentiation.
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45
An example of synergy in business is

A) Amazon's use of the Internet to sell books.
B) Bank of America acquiring Countrywide Financial to reach a large pool of new customers.
C) Blockbuster combining traditional video rental with online video rental.
D) Walmart's order entry and inventory management system to coordinate with suppliers.
E) Nike's use of technology to improve its product offerings.
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46
An example of a keystone firm within a business ecosystem is

A) Apple and software application writers in the mobile platform ecosystem.
B) GUESS and the fashion ecosystem.
C) Citibank and the ATM ecosystem.
D) American Airlines and the computerized reservation ecosystem.
E) Nike and the athletic apparel ecosystem.
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47
Which of the following represent the primary activities of a firm?

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 services
E) organization infrastructure, human resources, technology, and procurement
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48
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. This is referred to as

A) the point of no return.
B) the law of diminishing returns.
C) supply and demand.
D) network inelasticity.
E) the invisible hand.
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49
A virtual company

A) uses networks to link people, assets, and ideas.
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.
E) is limited by traditional organizational boundaries.
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50
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) competitive forces
B) value chain
C) bargaining power
D) new entrant
E) rivalry
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51
Which of the following is one of the support activities in a firm's value chain?

A) inbound logistics
B) operations
C) sales and marketing
D) service
E) technology
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52
An activity businesses perform to measure and compare business processes to similar processes of other companies within their industry is

A) benchmarking.
B) best practices.
C) value chain analysis.
D) strategic systems analysis.
E) secondary activities.
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53
How do information systems enhance core competencies?

A) by providing better reporting facilities
B) by creating educational opportunities for management
C) by allowing operational employees to interact with management
D) by encouraging the sharing of knowledge across business units
E) by fostering synergies among departments
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54
When two organizations pool markets and expertise that result in lower costs and generate profits, it is referred to as creating

A) a value web.
B) a value chain.
C) net marketplaces.
D) core competencies.
E) synergies.
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55
A competitive force challenging the publishing industry is

A) positioning and rivalry among competitors.
B) low cost of entry.
C) substitute products or services.
D) customers' bargaining power.
E) suppliers' bargaining power.
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56
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.

A) Product differentiation
B) Low-cost leadership
C) Customer efficiency
D) Mass customization
E) Switching cost
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57
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
E) by decreasing switching costs
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58
The expenses incurred by a customer or company in lost time and resources when changing from one supplier or system to a competing supplier or system are known as

A) retention costs.
B) preservation costs.
C) differentiation costs.
D) switching costs.
E) variation costs.
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59
What are the most successful solutions or methods for achieving a business objective?

A) value activities
B) best processes
C) core competencies
D) best practices
E) benchmarks
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60
A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n)

A) industry value chain.
B) business ecosystem.
C) value web.
D) consortia.
E) synergy chain.
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61
Switching costs increase when customers are strongly linked to products and platforms.
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62
High product differentiation is a sign of a transparent marketplace.
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63
A(n) ________ 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.

A) value chain
B) support web
C) value web
D) consortium
E) firm network
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64
'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits.
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65
You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better Bodies use in applying information services to achieve a competitive advantage?
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66
In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer.
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67
The value chain model classifies all company activities as primary activities.
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68
Customers are one of the competitive forces that affect an organization's ability to compete.
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69
A(n) ________ is an activity at which a firm excels as a world-class leader.

A) expertise area
B) competitive advantage
C) growth driver
D) efficiency
E) core competency
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70
The effect of the Internet has been to decrease the bargaining power of customers.
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71
A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.
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72
The parts of an organization's infrastructure, human resources, technology, and procurement that make the delivery of the firm's products or services possible are known as ________ activities.

A) primary
B) auxiliary
C) secondary
D) service
E) support
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73
The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms.
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74
Information systems are used to enable new products and services via product differentiation.
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75
In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site.
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76
An efficient customer response system directly links consumer behavior to distribution and production and supply chains.
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77
Mass customization offers individually tailored products or services using the same resources as mass production.
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78
You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert?
Which ones will it have difficulty exercising?
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79
The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.
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80
The text describes Michael Porter's view of the Internet as somewhat negative. What negative influences does Porter see?
Describe several positive influences the Internet has on business. Do these outweigh the negative influences?
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