Question 1

A disruptive innovation is ________.

Accepted Answer

A disruptive innovation is a new product or service that has the potential to reshape an industry. It typically provides a simpler, cheaper, and more convenient solution to an existing problem, creating a new market and eventually displacing established players. Disruptive innovations are not necessarily harmful to people or society and do not necessarily raise environmental concerns. They may increase switching costs and entry barriers, but this is not a defining characteristic.

Question 2

In the context of Porter's five forces, what impact will patents have on a business?

Accepted Answer

Patents create a barrier to entry for new competitors, as they make it more difficult and expensive for them to develop similar products without infringing on the patent. This reduces the threat of new entrants in the industry.

Question 3

Which of the following is an accurate justification for the view that the Internet is the most important disruptive innovation of the twentieth century?

Accepted Answer

The Internet allowed for easier entry into markets for newcomers and provided buyers with more information, disrupting traditional business models. This has had a significant impact on industries such as retail, media, and advertising. The reduced entry barriers, increased transparency, and empowerment of buyers make the Internet a highly disruptive innovation.

Question 4

Which of the following governmental actions will increase the threat of new entrants in a market?

Accepted Answer

By reducing the interest rates on credit for small businesses, the government is making it easier for new entrants to obtain funding and compete in the market. This increases the threat of new entrants.

Answer: D
 By increasing the cash reserve ratio to tackle inflation, the Federal Reserve is making it more difficult for small businesses to obtain funding, which may decrease the threat of new entrants in the market.

Question 5

Which of the following pairs of products are complementary to each other?

Accepted Answer

Complementary goods are products that are typically used together, where the use of one product increases the use of the other. Computers and software are complementary because software is required for a computer to perform specific tasks, making them directly related in use.

Question 6

Which of the following is a fundamental characteristic of an ecosystem?

Accepted Answer

An ecosystem includes all the related industries making complementary products and services, the competitors themselves, the suppliers, and the consumers. This interconnectedness and interdependence among the different parts of the ecosystem is a fundamental characteristic of ecosystems. Options A, B, and D do not adequately describe the characteristics of an ecosystem.

Question 7

Which of the following best describes support activities?

Accepted Answer

Support activities refer to processes including administration and management, human resources, procurement, and technology assistance. These activities do not directly relate to the creation, marketing, sale, or delivery of products and services, but they are necessary for the organization to function effectively. They support the primary activities of the organization.

Question 8

The ecosystem in which a company is embedded is a(n)________.

Accepted Answer

The ecosystem in which a company is embedded is an economic community that includes related industries. This includes suppliers, distributors, customers, competitors, and any other entities that impact the business.

Question 9

Which of the following is most closely associated with sustaining technologies?

Accepted Answer

Sustaining technologies are incremental improvements that optimize existing processes or products with the goal of appealing to loyal customers and improving efficiency.

Question 10

Which of the following is a primary activity of an automobile manufacturer?

Accepted Answer

Assembling automobile parts is a primary activity of an automobile manufacturer as it directly involves the production process of automobiles. Administration and management of infrastructure, human resource management, and inventory tracking are important support activities for an automobile manufacturer but are not primary activities directly involved in the production of automobiles.

Question 11

Creative destruction occurs when ________.

Accepted Answer

Creative destruction refers to the process of disruptive innovations posing a threat to established players, ultimately leading to the demise of those players and the emergence of new ones. This leads to the creation of new markets and the destruction of old ones.

Question 12

Which of the following is true of creative destruction?

Accepted Answer

Creative destruction refers to the process by which established businesses are replaced by new ones that offer better solutions, products, or services. This process often creates opportunities for entrepreneurs and newcomers to succeed against incumbents in an industry. It does not necessarily involve illegal innovations or techniques, nor does it always increase operational costs or reduce profits for the entire industry. Sometimes, it may happen when technologies that provide process-streamlining advantages come to the fore, but this is not always the case.

Question 13

Which of the following is commonly used by organizations to influence the operation of Porter's five forces?

Accepted Answer

Lobbying for governmental action is commonly used by organizations to influence the operation of Porter's five forces. This could include advocating for regulations, subsidies, or other policies that would benefit the organization and make it more competitive within the industry. Evasion of taxes and selling below or above market prices may temporarily impact the five forces, but they do not address the underlying competitive dynamics of the industry.

Question 14

Competition is not severe in the telecommunication industry in Brazil. More than ninety percent of the market is dominated by four large players. Which of the following will increase the rivalry among these four players?

Accepted Answer

A significant slowdown in market growth would mean that the players have to compete for a smaller market share, which would increase rivalry among them. Option A would not affect the existing players and may actually reduce rivalry. Option C is a decision by one player and may not necessarily increase rivalry among the others. Option D would not affect the current players in Brazil but may create opportunities for new players to enter the market, reducing the concentration of the industry.

Question 15

Which of the following illustrates a sustaining technology?

Accepted Answer

Sustaining technologies are those that improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued. Airbags are an example of a technology that improves the safety and performance of existing cars without displacing the existing technology (cars themselves).

Question 16

Which of the following is an example of a disruptive innovation?

Accepted Answer

Disruptive innovation refers to an innovation that significantly alters the way that consumers, industries, or businesses operate. LCD monitors replacing CRT monitors in televisions is an example of disruptive innovation because it fundamentally changed the television industry by introducing a new technology that was superior in many ways (e.g., size, power consumption, image quality) to the existing technology, leading to the eventual obsolescence of CRT monitors.

Question 17

In cloud computing, employees use information systems that are ________.

Accepted Answer

Cloud computing involves using information systems and software that are hosted and managed by a vendor in a remote data center, rather than being installed locally within an organization. This allows employees to access these systems and data from anywhere with an internet connection, making it ideal for remote work and collaboration. Cloud systems can also be cost-effective, as they typically require less hardware and maintenance than locally-hosted systems.

Question 18

Which of the following is true of an ecosystem?

Accepted Answer

An ecosystem is a complex network of interconnected entities, where events in one arena can affect all players involved. This is because each entity is dependent on others for resources or services, and any disruption can have a cascading effect on the entire ecosystem.

Question 19

The activities that are directly related to the process by which products and services are created, marketed, sold, and delivered are called ________ activities.

Accepted Answer

Primary activities are the core activities that are directly related to the process by which products and services are created, marketed, sold, and delivered. These activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. Therefore, the best choice is D) primary activities.

Question 20

Which of the following is based on the cloud computing concept?

Accepted Answer

Cloud computing refers to the delivery of computing services, including software, storage, and processing power, over the internet. An information system shared by two or more businesses and accessed via the internet is based on the cloud computing concept. The other options do not involve cloud computing.

Quiz 2: Information Systems and Strategy